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California Grocer, Issue 2, 2016
Citation preview
Shopping For MERGERS AND ACQUISITIONS
CALIFORNIA GROCERS ASSOCIATION 2016 ISSUE 2
IN THIS ISSUE
Exploring Tomorrow Today
Saving The Planet Quietly
Foundation Inducts Industry ExecsPRSRT STDUS Postage PaidPermit No 1401Sacramento CA
For the latest industry news visit wwwcagrocerscom
September 25-27 2016Palm Springs California
The grocery industry is rapidly reshaping itself Spurred by emerging technologies and innovative new competitors there is a discernable shift in how food is produced distributed and purchased These evolutionary changes are redefining the industryrsquos traditional values of convenience selection and affordability
Retailers and brands are adapting to these new shopping realities by morphing their businesses through consolidations mergers targeted expansions and incubating new concepts Grocers are creating smaller smarter stores with a more targeted assortment of goods and integrating new technologies into their operations
As a result the new shape of the food industry is efficient decentralized agile and reimagines everything from sourcing and supply chain to sales collaboration and customer loyalty
GATHER LEARN PROFIT
Create a calendar reminder now and plan to join the single largest gathering of California grocery industry executives for three days of knowledge building personalized meetings and engaging social events Explore the issues that are reshaping our industry and learn how to transform your business for the next wave of grocery retailing
The CGA Strategic Conference distinctly blends uncommon educational sessions our signature one-on-one prescheduled meetings and time set aside to connect with colleagues to create one of the most productive industry events of the year
The Conference has an established reputation for presenting genuine thought-leaders who address the emerging trends that will most impact your business Yoursquoll gather tangible insights and unique creative takeaways that you can immediately apply to your business
Our concierge-level meeting services offer you and your team a highly efficient way to book the business-critical appointments you need to justify the time away from your office Blend in social events that are relaxed and approachable and you have the perfect recipe for one of the grocery industryrsquos most successful conferences
SPONSORSHIP OPPORTUNITIES
The CGA Strategic Conference offers a wide variety of sponsorship packages and customized opportunities to promote your companyrsquos products equipment or services Take advantage of this unique opportunity to meet with Californiarsquos top grocery decision makers
As a conference sponsor yoursquoll receive a customized pre-scheduled meeting agenda so whether you are a new niche product or an established national brand the CGA Strategic Conference provides a highly productive forum to meet one-on-one with buyers from Californiarsquos top retail companies
MARK YOUR CALENDAR
ldquoThe CGA Strategic Conference is exceptional in that there are national and regional decision makers from many of the largest CPGs The retailer has the opportunity to network with many of these companies and work at strengthening their relationship This makes the conference so effective and quite unique to be able to develop this many relationships all at one venuerdquo
Kurt EricksonVallarta Supermarkets
ldquoCA GROWN was a first time exhibitorsponsor at the 2015 CGA Strategic Conference and we had meeting success well beyond our wildest expectations We found grocers willing to share stories about their customers growing interest in locally grown products and we are certain that this meeting will be the beginning of long-lasting grocer relationships including retail promotions and more in the years aheadrdquo
Steve Burns
CA GROWN
For complete sponsorship information including a list of participating retailers and sponsorship prospectus contact
Beth Wright
Senior Director Events amp SponsorshipCalifornia Grocers Association(916) 448-3545 | (800) 794-3545Bwrightcagrocerscom
ldquoThe CGA Strategic Conference is exceptional in that there are national and regional decision makers from many of the largest CPGs The retailer has the opportunity to network with many of these companies and work at strengthening their relationship This makes the conference so effective and quite unique to be able to develop this many relationships all at one venuerdquo
Kurt EricksonVallarta Supermarkets
wwwcgastrategicconferencecom
UNIQUE SPONSORSHIPS
We have taken the typical trade show experience and reshaped it into a uniquely productive opportunity to build business with your top customers
Sunday September 25
Illuminators Golf Tournament
Opening General Session
Opening Reception
After-hours Social Event
Monday September 26Monday September 26Monday September 26
Collaborative Share Groups
Opening Remarks and General Session
Pre-Scheduled Business Meetings
Reception amp Illuminators Special Event
Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27
Multiple Educational Sessions amp Retailers Spotlight
Pre-scheduled Business Meetings
Luncheon Keynote Address
Illuminators Golf Tournament
Opening General Session
Opening Reception
After-hours Social Event
Collaborative Share Groups
Opening Remarks and General Session Opening Remarks and General Session
Pre-Scheduled Business Meetings
Reception amp Illuminators Special Event
Multiple Educational Sessions amp Retailers Spotlight
Pre-scheduled Business Meetings
Luncheon Keynote Address Luncheon Keynote Address Luncheon Keynote Address Luncheon Keynote Address
C
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CM
MY
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CMY
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CalGrocer_ReshapeAd_8pdf 1 4416 1120 AM
September 25-27 2016Palm Springs California
The grocery industry is rapidly reshaping itself Spurred by emerging technologies and innovative new competitors there is a discernable shift in how food is produced distributed and purchased These evolutionary changes are redefining the industryrsquos traditional values of convenience selection and affordability
Retailers and brands are adapting to these new shopping realities by morphing their businesses through consolidations mergers targeted expansions and incubating new concepts Grocers are creating smaller smarter stores with a more targeted assortment of goods and integrating new technologies into their operations
As a result the new shape of the food industry is efficient decentralized agile and reimagines everything from sourcing and supply chain to sales collaboration and customer loyalty
GATHER LEARN PROFIT
Create a calendar reminder now and plan to join the single largest gathering of California grocery industry executives for three days of knowledge building personalized meetings and engaging social events Explore the issues that are reshaping our industry and learn how to transform your business for the next wave of grocery retailing
The CGA Strategic Conference distinctly blends uncommon educational sessions our signature one-on-one prescheduled meetings and time set aside to connect with colleagues to create one of the most productive industry events of the year
The Conference has an established reputation for presenting genuine thought-leaders who address the emerging trends that will most impact your business Yoursquoll gather tangible insights and unique creative takeaways that you can immediately apply to your business
Our concierge-level meeting services offer you and your team a highly efficient way to book the business-critical appointments you need to justify the time away from your office Blend in social events that are relaxed and approachable and you have the perfect recipe for one of the grocery industryrsquos most successful conferences
SPONSORSHIP OPPORTUNITIES
The CGA Strategic Conference offers a wide variety of sponsorship packages and customized opportunities to promote your companyrsquos products equipment or services Take advantage of this unique opportunity to meet with Californiarsquos top grocery decision makers
As a conference sponsor yoursquoll receive a customized pre-scheduled meeting agenda so whether you are a new niche product or an established national brand the CGA Strategic Conference provides a highly productive forum to meet one-on-one with buyers from Californiarsquos top retail companies
MARK YOUR CALENDAR
ldquoThe CGA Strategic Conference is exceptional in that there are national and regional decision makers from many of the largest CPGs The retailer has the opportunity to network with many of these companies and work at strengthening their relationship This makes the conference so effective and quite unique to be able to develop this many relationships all at one venuerdquo
Kurt EricksonVallarta Supermarkets
ldquoCA GROWN was a first time exhibitorsponsor at the 2015 CGA Strategic Conference and we had meeting success well beyond our wildest expectations We found grocers willing to share stories about their customers growing interest in locally grown products and we are certain that this meeting will be the beginning of long-lasting grocer relationships including retail promotions and more in the years aheadrdquo
Steve Burns
CA GROWN
For complete sponsorship information including a list of participating retailers and sponsorship prospectus contact
Beth Wright
Senior Director Events amp SponsorshipCalifornia Grocers Association(916) 448-3545 | (800) 794-3545Bwrightcagrocerscom
ldquoThe CGA Strategic Conference is exceptional in that there are national and regional decision makers from many of the largest CPGs The retailer has the opportunity to network with many of these companies and work at strengthening their relationship This makes the conference so effective and quite unique to be able to develop this many relationships all at one venuerdquo
Kurt EricksonVallarta Supermarkets
wwwcgastrategicconferencecom
UNIQUE SPONSORSHIPS
We have taken the typical trade show experience and reshaped it into a uniquely productive opportunity to build business with your top customers
Sunday September 25
Illuminators Golf Tournament
Opening General Session
Opening Reception
After-hours Social Event
Monday September 26Monday September 26Monday September 26
Collaborative Share Groups
Opening Remarks and General Session
Pre-Scheduled Business Meetings
Reception amp Illuminators Special Event
Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27
Multiple Educational Sessions amp Retailers Spotlight
Pre-scheduled Business Meetings
Luncheon Keynote Address
Illuminators Golf Tournament
Opening General Session
Opening Reception
After-hours Social Event
Collaborative Share Groups
Opening Remarks and General Session Opening Remarks and General Session
Pre-Scheduled Business Meetings
Reception amp Illuminators Special Event
Multiple Educational Sessions amp Retailers Spotlight
Pre-scheduled Business Meetings
Luncheon Keynote Address Luncheon Keynote Address Luncheon Keynote Address Luncheon Keynote Address
C
M
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MY
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CalGrocer_ReshapeAd_8pdf 1 4416 1120 AM
CHAIRMAN APPOINTMENTS
Kevin Arceneaux Mondelez International Inc
Phil Miller CampS Wholesale Grocers
Dave Jones Kellogg Company
EXECUTIVE COMMITTEE
Chairman of the Board Kevin Konkel Raleyrsquos
First Vice Chair Diana Godfrey Smart amp Final Stores
Second Vice Chair Jim Wallace Albertsons Companies Inc
Treasurer Bob Parriott Twain Harte Market
Secretary Kendra Doyel Ralphs Grocery Company
Immediate Past Chair Joe Falvey Unified Grocers Inc
INDEPENDENT OPERATOR
COMMITTEE CHAIR
DIRECTORS Raul Aguilar Anheuser-Busch InBev
Jon Alden Jelly Belly Candy Co
Renee Amen Super A Foods
Teresa Anaya Northgate Gonzalez Markets
Joe Angulo El Super (Bodega Latina)
Rich Arnold Oberto Brands
Denny Belcastro Kimberly-Clark Corp
Bob Bukovec Tyson Foods Inc
Paul Cooke Nestleacute Purina PetCare
Brent Cotten The Hershey Company
Willie Crocker Bimbo Bakeries USA
Steve Dietz Tonyrsquos Fine Foods
Ted Gardner Rio Ranch Markets
Jon Giannini Nutricion Fundamental Inc
Dick Gong G amp G Supermarket Inc
Robin Graf Whole Foods Market
Ryan Jost Procter amp Gamble
Arthur D Jackson Jr Costco Wholesale
Michel LeClerc North State Grocery Inc
Eric Lindberg Jr Grocery Outlet Inc
Dave Madden MillerCoors
Jonathan Mayes Albertsons Companies Inc
Joe McDonnell Campbell Soup Company
Mark McLean CROSSMARK
Casey McQuaid E amp J Gallo Winery
Mario Mediati The Clorox Company
Lynn Melillo Bristol Farms
Dan Meyer Stater Bros Markets
Hee-Sook Nelson Gelsonrsquos Markets
Nicole Pesco Save Mart Supermarkets
Chris Podesto Food 4 Less (Stockton)Rancho San Miguel Markets
Mike Ridenour The Kraft Heinz Company
Casey Rodacker Mar-Val Food Stores Inc
Dean Ryan Tops Fresh Market
Denny Silva Coca-Cola Refreshments
Doug Todd PepsiCo Inc
Jim Van Gorkom NuCal Foods
Michael Walton Unilever
Kevin Young Youngrsquos Payless Market IGA
C G A | Board of Directors
Dennis Darling Foods Etc
|
CA
LIF
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2
FEATURESMergers and Acquisitions 2015 was a record year for all merger and acquisition activity and 2016 might hit the same heady heights The reasons are simple and not surprising
Saving the Planet Quietly For years now therersquos been a quiet movement under way on the part of the food industry to save the planet And best of all these sustainability efforts arehellipwell sustainable
Exploring Tomorrow TodayA California-based think tank is exploring global economics generational trends and technological developments to learn more about where and how people will live eat and shop in the future
Foundation Inducts Industry ExecsMore than 600 industry peers family and friends gathered in Costa Mesa Calif Recently to honor three grocery executives inducted into the CGA Educational Foundation Hall of Achievement
COLUMNSPresidentrsquos Message Could Trump Bump Impact Senate Race 4
From The Chair Growing People Growing Grocery 6
Viewpoint ndash Kevin Coupe The Shopping Pate of Least Resistance 8
Capitol Insider Trouble Is Brewing With Californiarsquos Bottle Bill 20
Perspective Competing Ballot Measures to Increase Taxes and Wages 23
Inside the Beltway POS Credit Card Fraud Escalates 28
Washington Report Challenges Continue for EMV Implementation 30
DEPARTMENTSCGA News 10
15 Minutes With 64
Advertiser Index 68
C O N T E N T S | Issue 2
CALIFORNIA GROCERS ASSOCIATION
PresidentCEO Ronald Fong
Senior Vice President Government Relations and Public Policy Keri Askew Bailey
Senior Vice President Business Development amp Marketing Doug Scholz
Vice President Communications Dave Heylen
Controller Gary Brewer
Executive Director CGA Educational FoundationShiloh London
Senior Director Government Relations Aaron Moreno Senior Director Events amp Sponsorship Beth Wright
Director CGA Educational Foundation Brianne Page
California Grocer is the official publication of the California Grocers Association
1215 K Street Suite 700 Sacramento CA 95814 (916) 448-3545 (916) 448-2793 Fax wwwcagrocerscomFor association members subscription is included in membership dues Subscription rate for non-members is $100 and does not include CGA Buyersrsquo Guidecopy 2016 California Grocers Association
Publisher Ronald Fong E-mail rfongcagrocerscom
Editor Dave Heylen E-mail dheylencagrocerscom
Associate Editor Tony Ortega E-mail tortegacagrocerscom
For advertising information contact Tony Ortega E-mail tortegacagrocerscom
38
50
44
54
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P R E S I D E N T rsquo S M E S S A G E
Could Trump Bump Impact Senate RaceThe 2016 November General Election may be one of the most important and influential in some time In each issue of California Grocer leading up to the General Election I will examine the key national state and local races and their impact on our industry This issue Californiarsquos open Senate seat
Itrsquos been 24 years since the last open seat
Senate election in California Can you remember
who represented California prior to incumbent
Senators Diane Feinstein and Barbara Boxer My
guess is most canrsquot Last year Boxer said she was
throwing in the towel opening the door for a
new senator to be elected in November
Before examining the candidates letrsquos take a
quick look back at how we got here Boxer was
first elected to the Senate in 1992 the same
year Californiarsquos other Senator Diane Feinstein
took office after winning a special election to fill
the term left vacant by the resignation of Pete
Wilson Feinstein was re-elected in 1994 and has
served ever since
On the surface the race for Boxerrsquos seat appears
very low-key Itrsquos a safe bet that a Democrat
will retain this seat (Democrats enjoy an
overwhelming advantage right now in California)
And right now there is one clear leader in the
race Who challenges the frontrunner depends
on what happens in the June 7 primary Before I
explain letrsquos first look at the leading candidates
On the Democratic side California Attorney
General Kamala Harris and Congresswoman
Loretta Sanchez (46-CA) are the two top
frontrunners
As we go to press Harris enjoys a comfortable
lead over both her nearest party rival and
Republican challengers She has garnered the
endorsements of the California Democratic Party
State Controller Betty Yee State Treasurer John
Chiang Assembly Speaker Anthony Rendon and
the SEIU California to name a few Her total
campaign contribution nearly triples that of her
nearest contender Loretta Sanchez Harris would
be the first Indian-American and only the second
African-American woman senator
So what could make the June primary interesting
California uses a ldquojungle primaryrdquo system that
pits all candidates against each other regardless
of party in a primary race The top vote getters
go on to the general election
So while Harris appears a shoe-in for the
November ballot Sanchez is in danger of missing
the cut (not securing the second highest number
of votes in June) and watching the November
elections from the sidelines
A united Republican party is Sanchezrsquos biggest
concern If one GOP candidate runs in the
primary the party could steal the second
General Election ballot spot from Sanchez The
GOP took a major step in this direction when
Republican Senate candidate Rocky Chavez an
Oceanside assemblyman dropped out of the
race in early February
If Sanchez manages to secure the other ballot
spot this could set up a very interesting election
come November While Harrisrsquo numbers are
still considerably higher Sanchez stands to
become the first-ever Hispanic US Senator from
California a prospect that might have significant
appeal to the statersquos ever-growing Hispanic
population Sanchez also is considered more of a
moderate while Harris is seen as a solid liberal
The GOP on the other hand has not won a
Senate race in California since 1988 and any
contender will suffer the additional handicap
of running when the Democratic presidential
nominee is sure to carry California by a wide
margin maybe The wild card continues to be
RONALD FONG
PresidentCEO
|
CA
LIF
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4
Donald Trump and his ability to rally the Republican
vote
The top Republican candidates include former state
GOP chair Tom Del Beccaro and George ldquoDufrdquo
Sundheim The GOP field got a little more crowded in
early March with wealthy Silicon Valley businessman
Ron Unz throwing his hat in the ring Unz ran for
Californian governor in 1994 and is probably best
know for authoring Proposition 227 which effectively
eliminated bilingual education in California
Even with a Trump ldquobumprdquo the chances of a Republican
securing Boxerrsquos seat seems like a long shot at best
The real question appears to be whether a more
conservative Democrat or a long-shot Republican
has any real chance of defeating Kamala Harris
Stay tuned n
Nielsen database-latest 52 weeks ending 41115
bull Multi-Million Dollar National Advertisingbull 1 All-Natural Jerkybull Bringing New Customers to the Category
YOU GET MORE PROFIT OUT WHEN YOU PUT OBERTO BEEF JERKY IN
YOU GET OUT WHAT YOU PUT INTM
Retail moves quickly Does your accountant
Whether itrsquos protecting customer data implementing new point-of-sale technology or navigating the tax impact of a business strategy work with a team who speaks your languagemdashand moves at your speed
WWWMOSSADAMSCOMRETA IL
Certified Public Accountants | Business Consultants
F R O M T H E C H A I R
Growing People Growing GroceryCultivating the next generation of grocery leaders is a noble challenge worthy of our time energy and resources
The grocery business is an integral part of my
life I started working as a courtesy clerk at Bel
Air Market when I was 16 and joined Raleyrsquos
when the company was purchased in 1993
Sometimes the workplace was like a family
reunion for me ndash as many as 11 of my relatives
worked at Raleyrsquos or Bel Air at one point or
another Yoursquod probably describe my family as
having ldquogroceryrdquo in our blood
Irsquove stayed in the business because of the endless
doors of opportunity Prepared or perhaps
not I chose to walk through them and couldnrsquot
imagine working in any other industry Being in
the grocery business soon became my destiny
and I love what we do and who we serve
Of course working and growing the industry
isnrsquot limited to stocking products or managing
a department or supporting stores from the
corporate office We need produce buyers
growers farmers and manufacturers to provide
the food distributors and shippers to move it
from place to place and chefs to provide culinary
inspiration to create new in-store environments
for enjoying food
There are countless opportunities for young
people to join our industry and have a long
rewarding career but itrsquos up to us to find and
inspire them
How do we do that By connecting with young
people and providing resources to support them
in their pursuits
Letrsquos start by promoting STEM education ndash
Science Technology Engineering and Math ndash
for every student We need to fund scholarships
that make it easier for young people to advance
their learning
Our CGA Educational Foundation has supported
thousands of students in their educational
endeavors But most importantly by mentoring
the emerging stars in our communities and
sharing with them our success stories in the
grocery industry
CGA recently celebrated the careers of three
industry veterans Rob McDougall Donna
Tyndall and Bruce Wyatt at our annual Hall
of Achievement dinner They are outstanding
examples of leaders who have personally
invested their time talents and resources into
growing people who grow our companies and
our industry
Many companies in our great industry are
finding innovative ways to educate the industry
At Raleyrsquos wersquore reaching the next generation
through a program called ldquoWhere Your Food
Grows and Grazesrdquo which we developed
in cooperation with local ranchers and the
California Rangeland Trust
Students spend time on a ranch learning how
livestock are cared for and produce is grown and
then they tour one of our stores to find out more
about nutrition and our role in making fresh food
available to them Our goals are to inspire young
people to make good food choices and to share
our industryrsquos opportunities with them
Like farmers our job is to cultivate new talent
and watch it sprout The next generation of
leaders and innovators are out there waiting
for us to inspire them We can help this next
generation blossom grow and reap a harvest n
KEVIN KONKELCGA Chair of the Board
Senior Vice President Store Operations
Raleyrsquos Family of Fine Stores
|
CA
LIF
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Grocery Operations We Smooth lsquoem Out
Operational Eciency Greater Convenience More Money in Your Pocket
Cart Retrieval The industry leader in
shopping cart retrieval Reduce cart-loss expenses
and aggravation Detailed reporting from
an accountable partner
Because we understand the details of grocery operations we can save you money and aggravation dealing with things youd rather not have to Come to us to simplify your operations and save money
Cart Maintenance Reduce cart cleaning and
maintenance costs Lower new cart acquisition
expenses On-site quick return-to-action
convenience
Coupon Redemption Receive and reinvest manufacturer
reimbursement money faster Avoid costly chargebacks enjoy
one-stop convenience Zero upfront costs or counting
and sorting hassles
wwwcartretrievalnet1-800-252-4613
(818) 563-3031
CSCRC and CCRC are RMS companies ndash 1020 North Lake St Burbank CA 91502
FOLLOW US ON SOCIAL MEDIA
wwwcartretrievalnet
V I E W P O I N T
The Shopping Path of Least Resistance It isnrsquot quite the replicator technology fantasized about by ldquoStar Trekrdquo ndash with which one could just say ldquoEarly Grey Hotrdquo to a computer and it would magically appear ndash but that doesnrsquot mean it canrsquot ndash and wonrsquot ndash change the world
The fact is I think it has the potential to do both
Earlier this year we learned that Samsung
had unveiled a new refrigerator at the annual
Consumer Electronics Show (CES) in Las Vegas
But this wasnrsquot just a refrigerator It was a
ldquosmartrdquo refrigerator
Called the Family Hub Refrigerator this piece of
equipment comes with a 215-inch touchscreen
on one of its doors which people can use
to shop for products as they run low or out
Even more impressive the refrigerator also has
cameras inside that keep track of products as
they are removed so it can let people know
when supplies are running low And people
can access all this information from their smart
phones and use them to place orders
Wow Irsquom old enough to remember when
refrigerators didnrsquot even have automatic
defrosting (Young people reading this will have
to trust me on this We used to have to unplug
freezers and refrigerators and put pots of hot
water inside in order to defrost them It was a
total pain in the neck but a routine part of life
(Barbaric huh)
Samsung said that it has partnered with
MasterCard to provide payment services and
to start with MyWebGrocer FreshDirect and
ShopRite for online grocery ordering Needless
to say these platforms are thrilled
ldquoCommerce-enabled devices like the Family
Hub refrigerator represent an unprecedented
opportunity for our customers because it puts
them right where the consumer path to purchase
begins in the kitchenrdquo said Eric Healy president
of MyWebGrocer And Jodi Kahn FreshDirectrsquos
Chief Consumer Officer observed that it created
a ldquofrictionlessrdquo and ldquoseamlessrdquo road between
shopper and shop
Bingo
Not long after Samsung made its announcement
I got an email from Amazon promoting a new
item available on the site ndash a Brita water pitcher
that comes with a filter that enables the consumer
to have cleaner better-tasting water
Except that this was a pitcher with a curveball
ndash because this Brita pitcher is WiFi enabled
KEVIN COUPEFounder
MorningNewsBeatcom
Commerce-enabled devices like the Family Hub Refrigerator represent an unprecedented opportunity for our customers because it puts them right where the consumer path to purchasebegins in the kitchen
iStock
|
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V I E W P O I N T
It comes the email said ldquoequipped with a built-in
counter that tracks the amount of water that passes
through the pitcherrsquos filter The pitcher itself will
automatically order a new filter through Amazon Dash
Replenishment when the old filter nears its capacity
This new connected pitcher with Amazon Dash
Replenishment gives Brita owners exactly what they
want ndash a new Brita filter on their doorstep at the time
they need itrdquo
Pretty cool
(Irsquom tempted here to tell younger readers that I can
remember a time when we had to fetch water from
the well with a bucket and a rope but Irsquom not quite
that old)
The Brita Infinity Pitcher will cost about 45 bucks
which seems to be about a third more expensive than
most of the Brita pitchers that I found on Amazon
but the argument is that the tech-driven convenience
will make the price difference palatable And I have to
say that I think the argument is pretty compelling Or
to coin a phrase it is an argument that holds water
Innovations along these lines have been much
discussed over the years and it only was a matter of
time before dreams and reality met in such a way
that products like these could become mainstream
Without a doubt wersquore pretty much there products
like the Family Hub Refrigerator or Amazonrsquos
ecosystem-centric strategies (which are tied to the
Echo Subscribe-and-Save the Dash replenishment
system and even the delivery drones that probably
will be flying over our homes one of these days) are
putting us right in the middle of what could turn out
to be a pretty remarkable time And retailers have to
be prepared to embrace this revolution which almost
certainly will unfold faster than anyone expects
Interestingly Ford and Amazon announced at CES that
they are working on an initiative ldquogranting Ford owners
unprecedented access to their connected-home devices
from their cars and vice versardquo
And the Amazon ecosystem expands a little more
What is important to remember here is that once one
buys a refrigerator or a water pitcher it usually will be
quite some time before you have to replace them The
refrigerator only has value if it is filled with food that
you want to eat and the pitcher only has value if you
have the filters that create cleaner tastier water And
so it is critical for companies like Samsung and Brita
to find ways to be more relevant and useful which is
exactly what theyrsquove done
One of the things that traditional retailers have to
realize is that the advent of smart appliances and the
expanding ecosystems being created by some retailer
platforms ndash especially but not limited to Amazon ndash
are combining to create an environment in which it
is less and less necessary for people to actually go to
the store These progressive-minded companies are
creating paths of least resistance that provide few
reasons for consumers to detour elsewhere
Not everybody and not all the time But enough to
have an impact on a lot of bottom lines
One of the things that one finds a lot at food industry
conferences is people who like to cast doubt on the
e-revolution They like to talk about the people who
still want to go to the store about the hiccups that
can affect click-and-collect or delivery services about
how rural customers have different needs than urban
customers and about how selling points like ldquoyour
neighborhood grocerrdquo or ldquohometown proudrdquo or
ldquoold-fashioned servicerdquo or similar tropes are enough
for retailers to hang their hats on when competing in
this new environment
All of this may in fact be true And still not enough
to stave off the impact of technology especially on a
generation of shoppers that does not remember those
ancient pre-Amazon days
Not all people and not all the time But enough to
create leaks in the traditional market shares of a lot
of retailers and manufacturers Leaks that are likely to
grow bigger with time
The future is coming And it is traveling at Warp Eight n
One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution
CA
LIF
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IFO
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Grocers Converge on Sacramento
Grocery retailers and their supplier partners from
throughout California gathered in Sacramento in
late March to share business concerns with their
state representatives on key issues facing the
grocery industry
The face-to-face meetings with the majority of state
legislators highlighted the 2016 CGA Grocers Day
at the Capitol the Associationrsquos one-day member
advocacy event at the Statersquos Capitol
ldquoThis was a critical year for our members to
participate in CGArsquos premier member lobbying
activityrdquo said CGA President Ron Fong ldquoOur
members really stepped up and did a tremendous job
of sharing our story and providing valuable insight
into how our businesses operaterdquo
In addition to the face-to-face meetings attendees
heard from Gov Jerry Brown who addressed a
number of topics including the deal struck with labor
leaders over Easter weekend to introduce legislation
that will raise the statersquos minimum wage to $15
The governor said a deal needed to be struck as
an alternative to a minimum wage proposition
on the November ballot that would be even more
burdensome on Californiarsquos business community
The Governorrsquos remarks were met with skepticism
by the Association who later released a statement
chiding the governor for not including the business
community in its meeting with labor
ldquoOur members are dismayed at the events of the
past three daysrdquo Fong said in a written statement to
the media ldquoMajority Democrats and the Governor
(l to r) Jonathan Mayes Albertsons Kendra Doyel Ralphs Gov Jerry Brown Diana Godfrey Smart amp Final Ron Fong CGA
(l to r) Charla Giles Save Mart Supermarket Assemblymember Rudy Salas Michel LeClerc North State Grocery Inc Dave Madden MillerCoors
(l to r) Sen Richard Roth Mary Connelly Costco Eric Lindberg Jr Grocery Outlet Inc
CG
A N
EW
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rammed a $5 increase in Californiarsquos minimum
wage through the entire legislative process in
just three days They did so without meaningful
conversation or an opportunity for businesses that
will bear the cost burden to weigh in on the issuerdquo
Attendees were also briefed by CGA staff on the key
issues they would discuss during their legislative
visits These topics included employee scheduling
wine coupons food bank donation tax credits and
the statersquos beleaguered beverage container recycling
program
Following an afternoon of legislative meetings
CGA hosted its annual Presidentrsquos Reception that
allowed Grocers Day attendees to meet again with
state legislators and staff but in a more relaxed
environment
CGA also hosted its popular Ice Cream Social
located this year inside the State Capitol and was
sponsored by Clover Stornetta Farms which provided
the ice cream n
The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day
Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc
Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc
Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final
Breakfast Kellogg Company Save Mart Supermarkets
Luncheon Jelly Belly Candy Co
Ice Cream Social Clover Stornetta Farms Inc
Presidentrsquos Reception Command Packaging MillerCoors
Legislative visits highlighted CGArsquos Grocers Day at the Capitol
Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social
Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA
CG
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Foundation Selects New Trustee ChairBrad Askeland Vice President
Holiday Markets has
been elected Chair of the
California Grocers Association
Educational Foundation
Board of Trustees Askeland
had previously served as
Foundation Vice Chair
Askeland succeeds former CGAEF Chair Jim Van
Gorkom NuCal Foods who served in that position
since 2011 Mark Johnson Unified Grocers Inc was
elected to replace Askeland as the Boardrsquos Vice Chair
Jacquie Slobom Gelsonrsquos Markets and Jerry Landers
Raleyrsquos will continue as the Foundationrsquos Secretary
and Treasurer respectively
ldquoWe look forward to Brad building on the programs
Jim was instrumental in fosteringrdquo said CGAEF
President Ron Fong
Askelandrsquos responsibilities will be to guide and direct
the CGAEF Board of Trustees The Foundation
was created in 1992 to advance Californiarsquos grocery
industry through employee education industry
research and recognition of excellence
Askeland who has served as a Trustee since 2009
began his grocery career in 1988 as a courtesy clerk
for a small independent market before joining
North State Grocery Inc in 1995 He managed
several stores before being named director of human
resources in 2003 n
SEC Store Tour Features Draegerrsquos MarketThe California
Grocers Associationrsquo
Supplier Executive
Council kicked off
its 2016 Store Tour
series in March at
Draegerrsquos Market in
San Mateo The tour
was led by Richard
Draeger chief
operations officer
for the company
The Draeger executive led the SEC members on an
aisle-by-aisle tour sharing his companyrsquos business
philosophy and strategy Draeger told attendees that
for his company itrsquos not about having the lowest
prices but ldquomaking things easier for the consumerrdquo
He added that shopping local is what makes
Draegerrsquos different
Following the tour SEC members were treated to
a luncheon hosted by Draegerrsquos popular in-store
cooking school To learn more about becoming
an SEC member contact Sunny Porter CGA
at (916) 448-3545 n
New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER
Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes
Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom
Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo
2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916
The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals
CMYKFOCUS ON ALLERGENSTopical educational sessions and resources
June 5 - 7 | Houston
FOR MORE INFORMATION IDDBAORG 6083105000
REGISTER TODAYEXPANDED EXPO HOURS
NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths
SHOW amp SELL CENTERCAKE DECORATING CHALLENGE
MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH
JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain
CG
A N
EW
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CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in
March the second ldquotoolrdquo in its Grocery Compliance
Toolkit ndash this one focused on the Americans with
Disabilities Act
CGA contracted with the Sacramento-based law firm
of Downey Brand LLP to create a comprehensive
user-friendly ADA compliance guideline In addition
CGA hosted two regional seminars in conjunction
with the release of the ADA compliance ldquotoolrdquo In
addition the CGA Educational Foundation hosted a
one-hour webinar conducted by Downey Brand that
outlined the specifics of complying with the ADA
ldquoCalifornia grocers are increasingly seen as great
targets for opportunistic drive-by ADA public
access lawsuitsrdquo said CGA President Ron Fong
ldquoDespite recent changes to law serial plaintiffs
continue to send demand letters and file frivolous
lawsuits against grocers in an attempt to extract
monetary settlements We created this toolkit to
help retailers fend off these lawsuitsrdquo
The Grocery Compliance Toolkit was created as
a CGA member benefit to help grocery retailers
understand and manage the risks associated with
complying with state regulations related to the
grocery industry
The first ldquotoolrdquo was released last year and focused
on hazardous waste disposal
CGA members can download both the ADA and
hazardous waste disposal ldquotoolsrdquo from CGArsquos website
wwwcagrocerscom along with viewing both
seminars
CGA will release additional compliance ldquotoolsrdquo in the
coming months n
2014 2015
Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM
Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years
VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA
SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION
For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute
llaacutemenos o visite nuestra pagina de internet
Variety is the spice of lifeEnjoy it with our award winning
premium authentic line of cheeses
While that may hold true in the Lone Star State our
friends from Texas may be shocked to find that the
middle of the road in California is a relatively safe
place to be But finding safety on those center lines
wasnrsquot always so easy
Open primaries and the rise of the moderates
particularly on the Democratic side of the aisle have
widened that middle of the road from a dangerously
thin series of narrow yellow stripes to a ten-foot
wide median safe from most passing traffic
In a nation that divides its states into a red column
(for Republicans) and a blue column (for Democrats)
California exists solidly in the blue column with
Democrats holding every statewide office as well as
near supermajorities in both legislative houses
However a closer look reveals unexpected patches of
purple dotting the political map
Within these purple areas are a number of legislative
districts that reflect a uniquely Californian political
identity ndash a laissez faire attitude on social issues
mixed with a more conservative middle-of-the-road
view towards taxes and regulation
It was the voters in these areas the backers of
Proposition 14 had in mind back in 2010 when they
successfully pressed for passage of this initiative
to bring open primaries to California effectively
changing the game of legislative elections in our state
The rationale for passage was simple
In an overall political climate that often forced
candidates to the far-left and far-right during
primary elections in order to cater to the base to
win their partyrsquos nomination the general election
would often leave middle-of-the-road voters from
both parties (as well as independents) with no viable
candidates to support
GO
VE
RN
ME
NT
RE
LA
TIO
NS
Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD
BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo
In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses
Continued on p 18
Aaron Moreno Senior Director
Government Relations CGA
iStock
CA
LIF
OR
NIA
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17
If all candidates stood for primary election at the
same time with all voters choosing the top-two vote
getters for the general election regardless of party
open primary backers reasoned that candidates
would have to broaden their appeal to all voters in
a legislative district not to just the ldquotrue believersrdquo
who often decided primary elections The result
would be more moderate legislators be they
Democrat or Republican
This has been the case as
illustrated by the elections
of Republicans Catherine
Baker and David Hadley
in Assembly districts that
had elected Democrats in
previous election cycles Both
won due to their willingness
and ability to speak to voters from
both parties from the primary all the way
to the general election This would not have been
possible without open primaries
The open primary has not only changed the strategy
of candidates looking to enter the Legislature it
has also changed the way interest groups develop
strategies to elect legislators that best represent their
world views
Californiarsquos business interests have been particularly
savvy in adapting to these changes by adopting
strategies for supporting legislative candidates
that were once unheard of There was once a time
when it was automatic that these business interests
only backed Republican candidates This has
changed particularly in districts with a majority of
Democratic voters
In these districts it is not uncommon to see a
general election featuring two Democrats These
types of races provide a perfect synergy between
Democrats running from a more moderate position
and business interests who see a benefit from having
such political perspectives in the Legislature
This new breed of moderate Democrat would
have found it hard to advance out of a traditional
Democratic primary where the winner was decided
by the hard-core base
In the open primary system a moderate Democrat
can not only survive but thrive making it to the
general election by taking positions that appeal not
just to their fellow Democrats but to decline-to-state
and even moderate Republican voters
While remaining socially liberal like more
traditional Democrats moderates stand apart
by taking firm stances against new taxes and
unnecessary government regulation ndash two views
that align them with business interests
around the state
And the business community
has taken note spending
millions of dollars over the
past few years either in direct
donations to candidates
or the establishment of
political action committees
spending on behalf of
a candidate to elect more
moderate Democrats This has had
a big impact on the Legislature particularly in the
Assembly where the informal but highly influential
Moderate Caucus holds sway
Numbering anywhere from 10 to 15 depending on
who you ask and what is up for a vote on a particular
day this bloc of Democrats led by Assemblymembers
Rudy Salas from Bakersfield and Jim Cooper from
Sacramento have had considerable success helping
the business community in recent years by using
their influence to either water down legislation that
would adversely affect business preventing such
bills from being voted on by the full Assembly
or voting with Republicans to kill anti-business
legislation
Some notable business victories facilitated by the
Moderate Democrats during last yearrsquos legislative
DEM
REP
The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views
Continued from p 17
G O V E R N M E N T R E L AT I O N SCONTINUED
|
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G O V E R N M E N T R E L AT I O N S
session were the defeat of legislation that would
have required a 50 percent reduction in petroleum
use in motor vehicles the preventing of legislation
increasing the minimum wage from being heard on
the Assembly Floor and the preventing of legislation
requiring predictive scheduling from also being
heard on the Assembly Floor among others
Business groups such as CGA and others have
benefitted from supporting the candidacies of
these Moderate Democrats While their support
is certainly not 100 percent even their support 50
to 60 percent of the time is enough to stave off the
seemingly never-ending onslaught of legislation that
has the potential to put a damper on the business
climate in California
Those percentages may not seem like much but
when you consider that without open primaries the
Democrats coming from these same Democratic
majority districts would often stand with business
20 percent of the time or less the value of Moderate
Democrats to business is high
So while the middle of the road in Texas may be
nothing more than road kill armadillos and yellow
stripes the medians in California are wide berths
that provide a cushion for business from forces that
donrsquot necessarily have their best interests in mind
We must all do our part to keep that cushion in
place The election of Moderate Democrats whenever
possible is a great way to do so n
Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto
Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats
July 27-28 2016
Register today at
wwwfresnofoodexpocom
For more information contact
Amy Fuentes at 559-227-9999
or infofresnofoodexpocom
Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much
more than just a trade show The Fresno Food Expo is a celebration of Central
Californiarsquos vibrant food community and a showcase of our regionrsquos most
innovative food and beverage producers
Whether you are sourcing for fresh product deli baked goods or beer and wine
the Fresno Food Expo is your opportunity to connect with local trendsetters and
CEOrsquos behind some of the nationrsquos largest food companies right in their backyard
Come sit at our table and join us for an experience
you wonrsquot find anywhere else
Discover the abundance of Central Californiarsquos Food Region
FREE Buyer Registration
raquo Grower amp Manufacturer Site Tours
raquo VIP Event amp Opening Reception
raquo Buyerrsquos Breakfast
raquo Business to Business Trade Show
Your registration includes access to the following events
FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo
C A P I T O L I N S I D E R
Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program
Californiarsquos Beverage Container Recycling
Program was created by legislation 30 years ago
At that time recycling was a new word and the
intent of the program was to change
consumer habit Glass and aluminum
containers were sold with a surcharge
which the consumer would receive
back if they returned the containers
In that day and age people
commonly purchased six-packs
of glass soda bottles from
their grocery store They were
encouraged to bring those
glass containers back to the
store and exchange them
for the next six-pack they
purchased The convenience
of bringing containers back to
the store was the impetus for
the convenience zones created
by the law
At that time curbside recycling
didnrsquot exist nor were there
any real markets for recycled
material
Over the years a lot has
changed in California
Our communities are different
The definition of convenience
has changed Industries reliant
on manufacturing with recycled
materials have been born and are
thriving Most important we have
changed the Californiarsquos throw away culture to
one focused on recycling and reuse
Yet Californiarsquos Bottle Bill has failed to keep up
with the times
Today the perfect storm is brewing
A number of California communities are revolting
against convenience zone recyclers placing fees
and others obstacles before them in an
effort to keep them away
These recyclers while generating the
majority of containers returned through
the program attract patrons that many
community leaders and grocery store
customers prefer not to see in the
parking lot of their local grocery
store
Petroleum prices have driven the
scrap price for plastic to a historic
low making recycled content more
expensive than virgin product
In addition the formula Cal Recycle
uses to determine the overall cost
of recycling has failed to accurately
capture recent increases in minimum
wage and other cost factors These
three elements combined have made
it nearly impossible for convenience
zone recyclers to remain in business
This is evident by the announcement
from RePlanet the Statersquos largest
convenience zone recycler in late
January to decertify 200 locations in
Northern California
The decertification of convenience
zones starts a process for Cal Recycle
First they are required to review the zones
where each site was located They can either
choose to exempt the zone from further service
or change the status of the zone from served to
unserved
LOUIE BROWN
Partner in the
Sacramento office
of Kahn Soares and
Conway LLP
iStock
|
CA
LIF
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C A P I T O L I N S I D E R
The decision to change a zone to unserved triggers an
announcement by Cal Recycle to all dealers in the zone
that they have 30 days to decide to take containers back
in the store or pay the $100 per day ldquoin lieurdquo fee
Cal Recycle is evaluating the zones impacted by the
decertification of RePlanet Since the number of
exempted zones is capped by statute it is expected Cal
Recycle will be forced to change the status on a large
number of zones to unserved and likely impact hundreds
of dealers in northern California This process is expected
to take the next 90 to 120 days to complete
In the meantime CGA and others are developing a
legislative strategy to address these issues before grocers
are required to take action Your legislative team is
focused on a comprehensive solution that takes the
grocer out of the position of the recycler of last resort
along with a number of other changes to bring the
program into 2016 n
iStock
CA
LIF
OR
NIA
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OC
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21
Dog chow n at u r a l plus vitamins amp minerals
is made with real chicken There ARE no artificial colors
and Yoshiloves itloves itloves it
I makeNO ARTIFICIALCOLORS OR PRESERVATIVES
MADEWITH Real Chicken
ldquo
rdquoBARBARA JDog Chow ProductionDavenport IA
I makeCOLORS OR PRESERVATIVES
New
Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA
reg
P E R S P E C T I V E
Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business
There are several proposed ballot measures that
may be on the November statewide ballot that
would make significant changes to Californiarsquos
minimum wage and tax laws This article takes
a brief look at the four competing tax increase
measures as well as two competing minimum
wage measures
COMPETING TAX INCREASE INITIATIVES FOR
2016 BALLOT
There are four competing tax increase measures
on this yearrsquos ballot They include
n A proposal by the California Hospital
Association and SEIU-UHW that would expand
and make permanent income tax increases
on Californiarsquos highest earners but also allow
Prop 30rsquos sales tax increase to expire in 2016
as scheduled
n A plan by SEIU-UHW and the California
Teachers Association that would extend the
income tax increases under Prop 30 until
2030 and would let the sales tax increase
expire in 2016 as scheduled
n A third measure would impose a significant
surcharge on property valued over $3 million
n A fourth measure would increase the tax on
tobacco products by $2 per pack
ldquoThe School Funding and Budget Stability Act
of 2016rdquo No 15-0065
This measure would extend until 112031 the
personal income tax rates established by Prop
30 and dedicate the funds entirely to schools
without the ability of the Legislature to suspend
or withhold funds even in a state budget crisis
The measure also exempts these funds from
the Statersquos Rainy Day Fund established by voters
in 2014 by Prop 2 (requiring a portion of state
revenues be allocated to the state budget reserve
and to paying down debt)
In Section 3 of the measure the following
statements of purpose and intent are set forth
ldquo(a) The chief purpose of this measure is to
protect our schools by temporarily extending
current income tax rates on wealthy
Californians instead of awarding a huge tax
break to couples earning more than half a
million dollars a year or individuals earning
more than a quarter million Instead of
sending money back into the pockets of the
wealthy this measure sends the money to a
special account that must be spent exclusively
on schools
ldquo(b) This measure is intended to keep California
on a track toward balanced budgets and
reliable funding for schools and community
colleges preventing a new round of
devastating cuts to public education and a
return to the days of chronic budget deficits
and funding cuts
ldquo(c) This measure guarantees in the Constitution
that the revenues it raises for schools will
be sent directly to school districts and
community colleges for classroom expenses
not administrative costs This school funding
cannot be suspended or withheld no matter
what happens with the state budgetrdquo
ldquoThe Invest in Californiarsquos Children Actrdquo
No 15-0070
This measure would make permanent the Prop
30 personal income tax rates after 2019 plus add
additional higher rates for those earning above
$1 million per year (individuals) or $2 million
(married filing jointly) with the highest bracket
of 143 percent and earmark the funds for
CHRIS MICHEL I
Legislative Advocate
Aprea amp Micheli Inc
Continued on p 24
CA
LIF
OR
NIA
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OC
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23
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
|
CA
LIF
OR
NIA
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OC
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24
P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
|
CA
LIF
OR
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OC
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26
CA
LIF
OR
NIA
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OC
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27
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
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LIF
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
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29
WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
iStock
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30
copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
LUM
INA
TO
RS
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LIF
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OC
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33
Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
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CA
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
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LIF
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
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Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
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NIA
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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NIA
GR
OC
ER
48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
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GR
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
RN
IA G
RO
CE
R |
55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
OR
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
September 25-27 2016Palm Springs California
The grocery industry is rapidly reshaping itself Spurred by emerging technologies and innovative new competitors there is a discernable shift in how food is produced distributed and purchased These evolutionary changes are redefining the industryrsquos traditional values of convenience selection and affordability
Retailers and brands are adapting to these new shopping realities by morphing their businesses through consolidations mergers targeted expansions and incubating new concepts Grocers are creating smaller smarter stores with a more targeted assortment of goods and integrating new technologies into their operations
As a result the new shape of the food industry is efficient decentralized agile and reimagines everything from sourcing and supply chain to sales collaboration and customer loyalty
GATHER LEARN PROFIT
Create a calendar reminder now and plan to join the single largest gathering of California grocery industry executives for three days of knowledge building personalized meetings and engaging social events Explore the issues that are reshaping our industry and learn how to transform your business for the next wave of grocery retailing
The CGA Strategic Conference distinctly blends uncommon educational sessions our signature one-on-one prescheduled meetings and time set aside to connect with colleagues to create one of the most productive industry events of the year
The Conference has an established reputation for presenting genuine thought-leaders who address the emerging trends that will most impact your business Yoursquoll gather tangible insights and unique creative takeaways that you can immediately apply to your business
Our concierge-level meeting services offer you and your team a highly efficient way to book the business-critical appointments you need to justify the time away from your office Blend in social events that are relaxed and approachable and you have the perfect recipe for one of the grocery industryrsquos most successful conferences
SPONSORSHIP OPPORTUNITIES
The CGA Strategic Conference offers a wide variety of sponsorship packages and customized opportunities to promote your companyrsquos products equipment or services Take advantage of this unique opportunity to meet with Californiarsquos top grocery decision makers
As a conference sponsor yoursquoll receive a customized pre-scheduled meeting agenda so whether you are a new niche product or an established national brand the CGA Strategic Conference provides a highly productive forum to meet one-on-one with buyers from Californiarsquos top retail companies
MARK YOUR CALENDAR
ldquoThe CGA Strategic Conference is exceptional in that there are national and regional decision makers from many of the largest CPGs The retailer has the opportunity to network with many of these companies and work at strengthening their relationship This makes the conference so effective and quite unique to be able to develop this many relationships all at one venuerdquo
Kurt EricksonVallarta Supermarkets
ldquoCA GROWN was a first time exhibitorsponsor at the 2015 CGA Strategic Conference and we had meeting success well beyond our wildest expectations We found grocers willing to share stories about their customers growing interest in locally grown products and we are certain that this meeting will be the beginning of long-lasting grocer relationships including retail promotions and more in the years aheadrdquo
Steve Burns
CA GROWN
For complete sponsorship information including a list of participating retailers and sponsorship prospectus contact
Beth Wright
Senior Director Events amp SponsorshipCalifornia Grocers Association(916) 448-3545 | (800) 794-3545Bwrightcagrocerscom
ldquoThe CGA Strategic Conference is exceptional in that there are national and regional decision makers from many of the largest CPGs The retailer has the opportunity to network with many of these companies and work at strengthening their relationship This makes the conference so effective and quite unique to be able to develop this many relationships all at one venuerdquo
Kurt EricksonVallarta Supermarkets
wwwcgastrategicconferencecom
UNIQUE SPONSORSHIPS
We have taken the typical trade show experience and reshaped it into a uniquely productive opportunity to build business with your top customers
Sunday September 25
Illuminators Golf Tournament
Opening General Session
Opening Reception
After-hours Social Event
Monday September 26Monday September 26Monday September 26
Collaborative Share Groups
Opening Remarks and General Session
Pre-Scheduled Business Meetings
Reception amp Illuminators Special Event
Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27
Multiple Educational Sessions amp Retailers Spotlight
Pre-scheduled Business Meetings
Luncheon Keynote Address
Illuminators Golf Tournament
Opening General Session
Opening Reception
After-hours Social Event
Collaborative Share Groups
Opening Remarks and General Session Opening Remarks and General Session
Pre-Scheduled Business Meetings
Reception amp Illuminators Special Event
Multiple Educational Sessions amp Retailers Spotlight
Pre-scheduled Business Meetings
Luncheon Keynote Address Luncheon Keynote Address Luncheon Keynote Address Luncheon Keynote Address
C
M
Y
CM
MY
CY
CMY
K
CalGrocer_ReshapeAd_8pdf 1 4416 1120 AM
September 25-27 2016Palm Springs California
The grocery industry is rapidly reshaping itself Spurred by emerging technologies and innovative new competitors there is a discernable shift in how food is produced distributed and purchased These evolutionary changes are redefining the industryrsquos traditional values of convenience selection and affordability
Retailers and brands are adapting to these new shopping realities by morphing their businesses through consolidations mergers targeted expansions and incubating new concepts Grocers are creating smaller smarter stores with a more targeted assortment of goods and integrating new technologies into their operations
As a result the new shape of the food industry is efficient decentralized agile and reimagines everything from sourcing and supply chain to sales collaboration and customer loyalty
GATHER LEARN PROFIT
Create a calendar reminder now and plan to join the single largest gathering of California grocery industry executives for three days of knowledge building personalized meetings and engaging social events Explore the issues that are reshaping our industry and learn how to transform your business for the next wave of grocery retailing
The CGA Strategic Conference distinctly blends uncommon educational sessions our signature one-on-one prescheduled meetings and time set aside to connect with colleagues to create one of the most productive industry events of the year
The Conference has an established reputation for presenting genuine thought-leaders who address the emerging trends that will most impact your business Yoursquoll gather tangible insights and unique creative takeaways that you can immediately apply to your business
Our concierge-level meeting services offer you and your team a highly efficient way to book the business-critical appointments you need to justify the time away from your office Blend in social events that are relaxed and approachable and you have the perfect recipe for one of the grocery industryrsquos most successful conferences
SPONSORSHIP OPPORTUNITIES
The CGA Strategic Conference offers a wide variety of sponsorship packages and customized opportunities to promote your companyrsquos products equipment or services Take advantage of this unique opportunity to meet with Californiarsquos top grocery decision makers
As a conference sponsor yoursquoll receive a customized pre-scheduled meeting agenda so whether you are a new niche product or an established national brand the CGA Strategic Conference provides a highly productive forum to meet one-on-one with buyers from Californiarsquos top retail companies
MARK YOUR CALENDAR
ldquoThe CGA Strategic Conference is exceptional in that there are national and regional decision makers from many of the largest CPGs The retailer has the opportunity to network with many of these companies and work at strengthening their relationship This makes the conference so effective and quite unique to be able to develop this many relationships all at one venuerdquo
Kurt EricksonVallarta Supermarkets
ldquoCA GROWN was a first time exhibitorsponsor at the 2015 CGA Strategic Conference and we had meeting success well beyond our wildest expectations We found grocers willing to share stories about their customers growing interest in locally grown products and we are certain that this meeting will be the beginning of long-lasting grocer relationships including retail promotions and more in the years aheadrdquo
Steve Burns
CA GROWN
For complete sponsorship information including a list of participating retailers and sponsorship prospectus contact
Beth Wright
Senior Director Events amp SponsorshipCalifornia Grocers Association(916) 448-3545 | (800) 794-3545Bwrightcagrocerscom
ldquoThe CGA Strategic Conference is exceptional in that there are national and regional decision makers from many of the largest CPGs The retailer has the opportunity to network with many of these companies and work at strengthening their relationship This makes the conference so effective and quite unique to be able to develop this many relationships all at one venuerdquo
Kurt EricksonVallarta Supermarkets
wwwcgastrategicconferencecom
UNIQUE SPONSORSHIPS
We have taken the typical trade show experience and reshaped it into a uniquely productive opportunity to build business with your top customers
Sunday September 25
Illuminators Golf Tournament
Opening General Session
Opening Reception
After-hours Social Event
Monday September 26Monday September 26Monday September 26
Collaborative Share Groups
Opening Remarks and General Session
Pre-Scheduled Business Meetings
Reception amp Illuminators Special Event
Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27
Multiple Educational Sessions amp Retailers Spotlight
Pre-scheduled Business Meetings
Luncheon Keynote Address
Illuminators Golf Tournament
Opening General Session
Opening Reception
After-hours Social Event
Collaborative Share Groups
Opening Remarks and General Session Opening Remarks and General Session
Pre-Scheduled Business Meetings
Reception amp Illuminators Special Event
Multiple Educational Sessions amp Retailers Spotlight
Pre-scheduled Business Meetings
Luncheon Keynote Address Luncheon Keynote Address Luncheon Keynote Address Luncheon Keynote Address
C
M
Y
CM
MY
CY
CMY
K
CalGrocer_ReshapeAd_8pdf 1 4416 1120 AM
CHAIRMAN APPOINTMENTS
Kevin Arceneaux Mondelez International Inc
Phil Miller CampS Wholesale Grocers
Dave Jones Kellogg Company
EXECUTIVE COMMITTEE
Chairman of the Board Kevin Konkel Raleyrsquos
First Vice Chair Diana Godfrey Smart amp Final Stores
Second Vice Chair Jim Wallace Albertsons Companies Inc
Treasurer Bob Parriott Twain Harte Market
Secretary Kendra Doyel Ralphs Grocery Company
Immediate Past Chair Joe Falvey Unified Grocers Inc
INDEPENDENT OPERATOR
COMMITTEE CHAIR
DIRECTORS Raul Aguilar Anheuser-Busch InBev
Jon Alden Jelly Belly Candy Co
Renee Amen Super A Foods
Teresa Anaya Northgate Gonzalez Markets
Joe Angulo El Super (Bodega Latina)
Rich Arnold Oberto Brands
Denny Belcastro Kimberly-Clark Corp
Bob Bukovec Tyson Foods Inc
Paul Cooke Nestleacute Purina PetCare
Brent Cotten The Hershey Company
Willie Crocker Bimbo Bakeries USA
Steve Dietz Tonyrsquos Fine Foods
Ted Gardner Rio Ranch Markets
Jon Giannini Nutricion Fundamental Inc
Dick Gong G amp G Supermarket Inc
Robin Graf Whole Foods Market
Ryan Jost Procter amp Gamble
Arthur D Jackson Jr Costco Wholesale
Michel LeClerc North State Grocery Inc
Eric Lindberg Jr Grocery Outlet Inc
Dave Madden MillerCoors
Jonathan Mayes Albertsons Companies Inc
Joe McDonnell Campbell Soup Company
Mark McLean CROSSMARK
Casey McQuaid E amp J Gallo Winery
Mario Mediati The Clorox Company
Lynn Melillo Bristol Farms
Dan Meyer Stater Bros Markets
Hee-Sook Nelson Gelsonrsquos Markets
Nicole Pesco Save Mart Supermarkets
Chris Podesto Food 4 Less (Stockton)Rancho San Miguel Markets
Mike Ridenour The Kraft Heinz Company
Casey Rodacker Mar-Val Food Stores Inc
Dean Ryan Tops Fresh Market
Denny Silva Coca-Cola Refreshments
Doug Todd PepsiCo Inc
Jim Van Gorkom NuCal Foods
Michael Walton Unilever
Kevin Young Youngrsquos Payless Market IGA
C G A | Board of Directors
Dennis Darling Foods Etc
|
CA
LIF
OR
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2
FEATURESMergers and Acquisitions 2015 was a record year for all merger and acquisition activity and 2016 might hit the same heady heights The reasons are simple and not surprising
Saving the Planet Quietly For years now therersquos been a quiet movement under way on the part of the food industry to save the planet And best of all these sustainability efforts arehellipwell sustainable
Exploring Tomorrow TodayA California-based think tank is exploring global economics generational trends and technological developments to learn more about where and how people will live eat and shop in the future
Foundation Inducts Industry ExecsMore than 600 industry peers family and friends gathered in Costa Mesa Calif Recently to honor three grocery executives inducted into the CGA Educational Foundation Hall of Achievement
COLUMNSPresidentrsquos Message Could Trump Bump Impact Senate Race 4
From The Chair Growing People Growing Grocery 6
Viewpoint ndash Kevin Coupe The Shopping Pate of Least Resistance 8
Capitol Insider Trouble Is Brewing With Californiarsquos Bottle Bill 20
Perspective Competing Ballot Measures to Increase Taxes and Wages 23
Inside the Beltway POS Credit Card Fraud Escalates 28
Washington Report Challenges Continue for EMV Implementation 30
DEPARTMENTSCGA News 10
15 Minutes With 64
Advertiser Index 68
C O N T E N T S | Issue 2
CALIFORNIA GROCERS ASSOCIATION
PresidentCEO Ronald Fong
Senior Vice President Government Relations and Public Policy Keri Askew Bailey
Senior Vice President Business Development amp Marketing Doug Scholz
Vice President Communications Dave Heylen
Controller Gary Brewer
Executive Director CGA Educational FoundationShiloh London
Senior Director Government Relations Aaron Moreno Senior Director Events amp Sponsorship Beth Wright
Director CGA Educational Foundation Brianne Page
California Grocer is the official publication of the California Grocers Association
1215 K Street Suite 700 Sacramento CA 95814 (916) 448-3545 (916) 448-2793 Fax wwwcagrocerscomFor association members subscription is included in membership dues Subscription rate for non-members is $100 and does not include CGA Buyersrsquo Guidecopy 2016 California Grocers Association
Publisher Ronald Fong E-mail rfongcagrocerscom
Editor Dave Heylen E-mail dheylencagrocerscom
Associate Editor Tony Ortega E-mail tortegacagrocerscom
For advertising information contact Tony Ortega E-mail tortegacagrocerscom
38
50
44
54
CA
LIF
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3
P R E S I D E N T rsquo S M E S S A G E
Could Trump Bump Impact Senate RaceThe 2016 November General Election may be one of the most important and influential in some time In each issue of California Grocer leading up to the General Election I will examine the key national state and local races and their impact on our industry This issue Californiarsquos open Senate seat
Itrsquos been 24 years since the last open seat
Senate election in California Can you remember
who represented California prior to incumbent
Senators Diane Feinstein and Barbara Boxer My
guess is most canrsquot Last year Boxer said she was
throwing in the towel opening the door for a
new senator to be elected in November
Before examining the candidates letrsquos take a
quick look back at how we got here Boxer was
first elected to the Senate in 1992 the same
year Californiarsquos other Senator Diane Feinstein
took office after winning a special election to fill
the term left vacant by the resignation of Pete
Wilson Feinstein was re-elected in 1994 and has
served ever since
On the surface the race for Boxerrsquos seat appears
very low-key Itrsquos a safe bet that a Democrat
will retain this seat (Democrats enjoy an
overwhelming advantage right now in California)
And right now there is one clear leader in the
race Who challenges the frontrunner depends
on what happens in the June 7 primary Before I
explain letrsquos first look at the leading candidates
On the Democratic side California Attorney
General Kamala Harris and Congresswoman
Loretta Sanchez (46-CA) are the two top
frontrunners
As we go to press Harris enjoys a comfortable
lead over both her nearest party rival and
Republican challengers She has garnered the
endorsements of the California Democratic Party
State Controller Betty Yee State Treasurer John
Chiang Assembly Speaker Anthony Rendon and
the SEIU California to name a few Her total
campaign contribution nearly triples that of her
nearest contender Loretta Sanchez Harris would
be the first Indian-American and only the second
African-American woman senator
So what could make the June primary interesting
California uses a ldquojungle primaryrdquo system that
pits all candidates against each other regardless
of party in a primary race The top vote getters
go on to the general election
So while Harris appears a shoe-in for the
November ballot Sanchez is in danger of missing
the cut (not securing the second highest number
of votes in June) and watching the November
elections from the sidelines
A united Republican party is Sanchezrsquos biggest
concern If one GOP candidate runs in the
primary the party could steal the second
General Election ballot spot from Sanchez The
GOP took a major step in this direction when
Republican Senate candidate Rocky Chavez an
Oceanside assemblyman dropped out of the
race in early February
If Sanchez manages to secure the other ballot
spot this could set up a very interesting election
come November While Harrisrsquo numbers are
still considerably higher Sanchez stands to
become the first-ever Hispanic US Senator from
California a prospect that might have significant
appeal to the statersquos ever-growing Hispanic
population Sanchez also is considered more of a
moderate while Harris is seen as a solid liberal
The GOP on the other hand has not won a
Senate race in California since 1988 and any
contender will suffer the additional handicap
of running when the Democratic presidential
nominee is sure to carry California by a wide
margin maybe The wild card continues to be
RONALD FONG
PresidentCEO
|
CA
LIF
OR
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4
Donald Trump and his ability to rally the Republican
vote
The top Republican candidates include former state
GOP chair Tom Del Beccaro and George ldquoDufrdquo
Sundheim The GOP field got a little more crowded in
early March with wealthy Silicon Valley businessman
Ron Unz throwing his hat in the ring Unz ran for
Californian governor in 1994 and is probably best
know for authoring Proposition 227 which effectively
eliminated bilingual education in California
Even with a Trump ldquobumprdquo the chances of a Republican
securing Boxerrsquos seat seems like a long shot at best
The real question appears to be whether a more
conservative Democrat or a long-shot Republican
has any real chance of defeating Kamala Harris
Stay tuned n
Nielsen database-latest 52 weeks ending 41115
bull Multi-Million Dollar National Advertisingbull 1 All-Natural Jerkybull Bringing New Customers to the Category
YOU GET MORE PROFIT OUT WHEN YOU PUT OBERTO BEEF JERKY IN
YOU GET OUT WHAT YOU PUT INTM
Retail moves quickly Does your accountant
Whether itrsquos protecting customer data implementing new point-of-sale technology or navigating the tax impact of a business strategy work with a team who speaks your languagemdashand moves at your speed
WWWMOSSADAMSCOMRETA IL
Certified Public Accountants | Business Consultants
F R O M T H E C H A I R
Growing People Growing GroceryCultivating the next generation of grocery leaders is a noble challenge worthy of our time energy and resources
The grocery business is an integral part of my
life I started working as a courtesy clerk at Bel
Air Market when I was 16 and joined Raleyrsquos
when the company was purchased in 1993
Sometimes the workplace was like a family
reunion for me ndash as many as 11 of my relatives
worked at Raleyrsquos or Bel Air at one point or
another Yoursquod probably describe my family as
having ldquogroceryrdquo in our blood
Irsquove stayed in the business because of the endless
doors of opportunity Prepared or perhaps
not I chose to walk through them and couldnrsquot
imagine working in any other industry Being in
the grocery business soon became my destiny
and I love what we do and who we serve
Of course working and growing the industry
isnrsquot limited to stocking products or managing
a department or supporting stores from the
corporate office We need produce buyers
growers farmers and manufacturers to provide
the food distributors and shippers to move it
from place to place and chefs to provide culinary
inspiration to create new in-store environments
for enjoying food
There are countless opportunities for young
people to join our industry and have a long
rewarding career but itrsquos up to us to find and
inspire them
How do we do that By connecting with young
people and providing resources to support them
in their pursuits
Letrsquos start by promoting STEM education ndash
Science Technology Engineering and Math ndash
for every student We need to fund scholarships
that make it easier for young people to advance
their learning
Our CGA Educational Foundation has supported
thousands of students in their educational
endeavors But most importantly by mentoring
the emerging stars in our communities and
sharing with them our success stories in the
grocery industry
CGA recently celebrated the careers of three
industry veterans Rob McDougall Donna
Tyndall and Bruce Wyatt at our annual Hall
of Achievement dinner They are outstanding
examples of leaders who have personally
invested their time talents and resources into
growing people who grow our companies and
our industry
Many companies in our great industry are
finding innovative ways to educate the industry
At Raleyrsquos wersquore reaching the next generation
through a program called ldquoWhere Your Food
Grows and Grazesrdquo which we developed
in cooperation with local ranchers and the
California Rangeland Trust
Students spend time on a ranch learning how
livestock are cared for and produce is grown and
then they tour one of our stores to find out more
about nutrition and our role in making fresh food
available to them Our goals are to inspire young
people to make good food choices and to share
our industryrsquos opportunities with them
Like farmers our job is to cultivate new talent
and watch it sprout The next generation of
leaders and innovators are out there waiting
for us to inspire them We can help this next
generation blossom grow and reap a harvest n
KEVIN KONKELCGA Chair of the Board
Senior Vice President Store Operations
Raleyrsquos Family of Fine Stores
|
CA
LIF
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6
Grocery Operations We Smooth lsquoem Out
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FOLLOW US ON SOCIAL MEDIA
wwwcartretrievalnet
V I E W P O I N T
The Shopping Path of Least Resistance It isnrsquot quite the replicator technology fantasized about by ldquoStar Trekrdquo ndash with which one could just say ldquoEarly Grey Hotrdquo to a computer and it would magically appear ndash but that doesnrsquot mean it canrsquot ndash and wonrsquot ndash change the world
The fact is I think it has the potential to do both
Earlier this year we learned that Samsung
had unveiled a new refrigerator at the annual
Consumer Electronics Show (CES) in Las Vegas
But this wasnrsquot just a refrigerator It was a
ldquosmartrdquo refrigerator
Called the Family Hub Refrigerator this piece of
equipment comes with a 215-inch touchscreen
on one of its doors which people can use
to shop for products as they run low or out
Even more impressive the refrigerator also has
cameras inside that keep track of products as
they are removed so it can let people know
when supplies are running low And people
can access all this information from their smart
phones and use them to place orders
Wow Irsquom old enough to remember when
refrigerators didnrsquot even have automatic
defrosting (Young people reading this will have
to trust me on this We used to have to unplug
freezers and refrigerators and put pots of hot
water inside in order to defrost them It was a
total pain in the neck but a routine part of life
(Barbaric huh)
Samsung said that it has partnered with
MasterCard to provide payment services and
to start with MyWebGrocer FreshDirect and
ShopRite for online grocery ordering Needless
to say these platforms are thrilled
ldquoCommerce-enabled devices like the Family
Hub refrigerator represent an unprecedented
opportunity for our customers because it puts
them right where the consumer path to purchase
begins in the kitchenrdquo said Eric Healy president
of MyWebGrocer And Jodi Kahn FreshDirectrsquos
Chief Consumer Officer observed that it created
a ldquofrictionlessrdquo and ldquoseamlessrdquo road between
shopper and shop
Bingo
Not long after Samsung made its announcement
I got an email from Amazon promoting a new
item available on the site ndash a Brita water pitcher
that comes with a filter that enables the consumer
to have cleaner better-tasting water
Except that this was a pitcher with a curveball
ndash because this Brita pitcher is WiFi enabled
KEVIN COUPEFounder
MorningNewsBeatcom
Commerce-enabled devices like the Family Hub Refrigerator represent an unprecedented opportunity for our customers because it puts them right where the consumer path to purchasebegins in the kitchen
iStock
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CA
LIF
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8
V I E W P O I N T
It comes the email said ldquoequipped with a built-in
counter that tracks the amount of water that passes
through the pitcherrsquos filter The pitcher itself will
automatically order a new filter through Amazon Dash
Replenishment when the old filter nears its capacity
This new connected pitcher with Amazon Dash
Replenishment gives Brita owners exactly what they
want ndash a new Brita filter on their doorstep at the time
they need itrdquo
Pretty cool
(Irsquom tempted here to tell younger readers that I can
remember a time when we had to fetch water from
the well with a bucket and a rope but Irsquom not quite
that old)
The Brita Infinity Pitcher will cost about 45 bucks
which seems to be about a third more expensive than
most of the Brita pitchers that I found on Amazon
but the argument is that the tech-driven convenience
will make the price difference palatable And I have to
say that I think the argument is pretty compelling Or
to coin a phrase it is an argument that holds water
Innovations along these lines have been much
discussed over the years and it only was a matter of
time before dreams and reality met in such a way
that products like these could become mainstream
Without a doubt wersquore pretty much there products
like the Family Hub Refrigerator or Amazonrsquos
ecosystem-centric strategies (which are tied to the
Echo Subscribe-and-Save the Dash replenishment
system and even the delivery drones that probably
will be flying over our homes one of these days) are
putting us right in the middle of what could turn out
to be a pretty remarkable time And retailers have to
be prepared to embrace this revolution which almost
certainly will unfold faster than anyone expects
Interestingly Ford and Amazon announced at CES that
they are working on an initiative ldquogranting Ford owners
unprecedented access to their connected-home devices
from their cars and vice versardquo
And the Amazon ecosystem expands a little more
What is important to remember here is that once one
buys a refrigerator or a water pitcher it usually will be
quite some time before you have to replace them The
refrigerator only has value if it is filled with food that
you want to eat and the pitcher only has value if you
have the filters that create cleaner tastier water And
so it is critical for companies like Samsung and Brita
to find ways to be more relevant and useful which is
exactly what theyrsquove done
One of the things that traditional retailers have to
realize is that the advent of smart appliances and the
expanding ecosystems being created by some retailer
platforms ndash especially but not limited to Amazon ndash
are combining to create an environment in which it
is less and less necessary for people to actually go to
the store These progressive-minded companies are
creating paths of least resistance that provide few
reasons for consumers to detour elsewhere
Not everybody and not all the time But enough to
have an impact on a lot of bottom lines
One of the things that one finds a lot at food industry
conferences is people who like to cast doubt on the
e-revolution They like to talk about the people who
still want to go to the store about the hiccups that
can affect click-and-collect or delivery services about
how rural customers have different needs than urban
customers and about how selling points like ldquoyour
neighborhood grocerrdquo or ldquohometown proudrdquo or
ldquoold-fashioned servicerdquo or similar tropes are enough
for retailers to hang their hats on when competing in
this new environment
All of this may in fact be true And still not enough
to stave off the impact of technology especially on a
generation of shoppers that does not remember those
ancient pre-Amazon days
Not all people and not all the time But enough to
create leaks in the traditional market shares of a lot
of retailers and manufacturers Leaks that are likely to
grow bigger with time
The future is coming And it is traveling at Warp Eight n
One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution
CA
LIF
OR
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IFO
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Grocers Converge on Sacramento
Grocery retailers and their supplier partners from
throughout California gathered in Sacramento in
late March to share business concerns with their
state representatives on key issues facing the
grocery industry
The face-to-face meetings with the majority of state
legislators highlighted the 2016 CGA Grocers Day
at the Capitol the Associationrsquos one-day member
advocacy event at the Statersquos Capitol
ldquoThis was a critical year for our members to
participate in CGArsquos premier member lobbying
activityrdquo said CGA President Ron Fong ldquoOur
members really stepped up and did a tremendous job
of sharing our story and providing valuable insight
into how our businesses operaterdquo
In addition to the face-to-face meetings attendees
heard from Gov Jerry Brown who addressed a
number of topics including the deal struck with labor
leaders over Easter weekend to introduce legislation
that will raise the statersquos minimum wage to $15
The governor said a deal needed to be struck as
an alternative to a minimum wage proposition
on the November ballot that would be even more
burdensome on Californiarsquos business community
The Governorrsquos remarks were met with skepticism
by the Association who later released a statement
chiding the governor for not including the business
community in its meeting with labor
ldquoOur members are dismayed at the events of the
past three daysrdquo Fong said in a written statement to
the media ldquoMajority Democrats and the Governor
(l to r) Jonathan Mayes Albertsons Kendra Doyel Ralphs Gov Jerry Brown Diana Godfrey Smart amp Final Ron Fong CGA
(l to r) Charla Giles Save Mart Supermarket Assemblymember Rudy Salas Michel LeClerc North State Grocery Inc Dave Madden MillerCoors
(l to r) Sen Richard Roth Mary Connelly Costco Eric Lindberg Jr Grocery Outlet Inc
CG
A N
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IFO
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11
rammed a $5 increase in Californiarsquos minimum
wage through the entire legislative process in
just three days They did so without meaningful
conversation or an opportunity for businesses that
will bear the cost burden to weigh in on the issuerdquo
Attendees were also briefed by CGA staff on the key
issues they would discuss during their legislative
visits These topics included employee scheduling
wine coupons food bank donation tax credits and
the statersquos beleaguered beverage container recycling
program
Following an afternoon of legislative meetings
CGA hosted its annual Presidentrsquos Reception that
allowed Grocers Day attendees to meet again with
state legislators and staff but in a more relaxed
environment
CGA also hosted its popular Ice Cream Social
located this year inside the State Capitol and was
sponsored by Clover Stornetta Farms which provided
the ice cream n
The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day
Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc
Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc
Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final
Breakfast Kellogg Company Save Mart Supermarkets
Luncheon Jelly Belly Candy Co
Ice Cream Social Clover Stornetta Farms Inc
Presidentrsquos Reception Command Packaging MillerCoors
Legislative visits highlighted CGArsquos Grocers Day at the Capitol
Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social
Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA
CG
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IFO
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Foundation Selects New Trustee ChairBrad Askeland Vice President
Holiday Markets has
been elected Chair of the
California Grocers Association
Educational Foundation
Board of Trustees Askeland
had previously served as
Foundation Vice Chair
Askeland succeeds former CGAEF Chair Jim Van
Gorkom NuCal Foods who served in that position
since 2011 Mark Johnson Unified Grocers Inc was
elected to replace Askeland as the Boardrsquos Vice Chair
Jacquie Slobom Gelsonrsquos Markets and Jerry Landers
Raleyrsquos will continue as the Foundationrsquos Secretary
and Treasurer respectively
ldquoWe look forward to Brad building on the programs
Jim was instrumental in fosteringrdquo said CGAEF
President Ron Fong
Askelandrsquos responsibilities will be to guide and direct
the CGAEF Board of Trustees The Foundation
was created in 1992 to advance Californiarsquos grocery
industry through employee education industry
research and recognition of excellence
Askeland who has served as a Trustee since 2009
began his grocery career in 1988 as a courtesy clerk
for a small independent market before joining
North State Grocery Inc in 1995 He managed
several stores before being named director of human
resources in 2003 n
SEC Store Tour Features Draegerrsquos MarketThe California
Grocers Associationrsquo
Supplier Executive
Council kicked off
its 2016 Store Tour
series in March at
Draegerrsquos Market in
San Mateo The tour
was led by Richard
Draeger chief
operations officer
for the company
The Draeger executive led the SEC members on an
aisle-by-aisle tour sharing his companyrsquos business
philosophy and strategy Draeger told attendees that
for his company itrsquos not about having the lowest
prices but ldquomaking things easier for the consumerrdquo
He added that shopping local is what makes
Draegerrsquos different
Following the tour SEC members were treated to
a luncheon hosted by Draegerrsquos popular in-store
cooking school To learn more about becoming
an SEC member contact Sunny Porter CGA
at (916) 448-3545 n
New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER
Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes
Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom
Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo
2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916
The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals
CMYKFOCUS ON ALLERGENSTopical educational sessions and resources
June 5 - 7 | Houston
FOR MORE INFORMATION IDDBAORG 6083105000
REGISTER TODAYEXPANDED EXPO HOURS
NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths
SHOW amp SELL CENTERCAKE DECORATING CHALLENGE
MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH
JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain
CG
A N
EW
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AL
IFO
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14
CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in
March the second ldquotoolrdquo in its Grocery Compliance
Toolkit ndash this one focused on the Americans with
Disabilities Act
CGA contracted with the Sacramento-based law firm
of Downey Brand LLP to create a comprehensive
user-friendly ADA compliance guideline In addition
CGA hosted two regional seminars in conjunction
with the release of the ADA compliance ldquotoolrdquo In
addition the CGA Educational Foundation hosted a
one-hour webinar conducted by Downey Brand that
outlined the specifics of complying with the ADA
ldquoCalifornia grocers are increasingly seen as great
targets for opportunistic drive-by ADA public
access lawsuitsrdquo said CGA President Ron Fong
ldquoDespite recent changes to law serial plaintiffs
continue to send demand letters and file frivolous
lawsuits against grocers in an attempt to extract
monetary settlements We created this toolkit to
help retailers fend off these lawsuitsrdquo
The Grocery Compliance Toolkit was created as
a CGA member benefit to help grocery retailers
understand and manage the risks associated with
complying with state regulations related to the
grocery industry
The first ldquotoolrdquo was released last year and focused
on hazardous waste disposal
CGA members can download both the ADA and
hazardous waste disposal ldquotoolsrdquo from CGArsquos website
wwwcagrocerscom along with viewing both
seminars
CGA will release additional compliance ldquotoolsrdquo in the
coming months n
2014 2015
Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM
Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years
VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA
SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION
For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute
llaacutemenos o visite nuestra pagina de internet
Variety is the spice of lifeEnjoy it with our award winning
premium authentic line of cheeses
While that may hold true in the Lone Star State our
friends from Texas may be shocked to find that the
middle of the road in California is a relatively safe
place to be But finding safety on those center lines
wasnrsquot always so easy
Open primaries and the rise of the moderates
particularly on the Democratic side of the aisle have
widened that middle of the road from a dangerously
thin series of narrow yellow stripes to a ten-foot
wide median safe from most passing traffic
In a nation that divides its states into a red column
(for Republicans) and a blue column (for Democrats)
California exists solidly in the blue column with
Democrats holding every statewide office as well as
near supermajorities in both legislative houses
However a closer look reveals unexpected patches of
purple dotting the political map
Within these purple areas are a number of legislative
districts that reflect a uniquely Californian political
identity ndash a laissez faire attitude on social issues
mixed with a more conservative middle-of-the-road
view towards taxes and regulation
It was the voters in these areas the backers of
Proposition 14 had in mind back in 2010 when they
successfully pressed for passage of this initiative
to bring open primaries to California effectively
changing the game of legislative elections in our state
The rationale for passage was simple
In an overall political climate that often forced
candidates to the far-left and far-right during
primary elections in order to cater to the base to
win their partyrsquos nomination the general election
would often leave middle-of-the-road voters from
both parties (as well as independents) with no viable
candidates to support
GO
VE
RN
ME
NT
RE
LA
TIO
NS
Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD
BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo
In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses
Continued on p 18
Aaron Moreno Senior Director
Government Relations CGA
iStock
CA
LIF
OR
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OC
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17
If all candidates stood for primary election at the
same time with all voters choosing the top-two vote
getters for the general election regardless of party
open primary backers reasoned that candidates
would have to broaden their appeal to all voters in
a legislative district not to just the ldquotrue believersrdquo
who often decided primary elections The result
would be more moderate legislators be they
Democrat or Republican
This has been the case as
illustrated by the elections
of Republicans Catherine
Baker and David Hadley
in Assembly districts that
had elected Democrats in
previous election cycles Both
won due to their willingness
and ability to speak to voters from
both parties from the primary all the way
to the general election This would not have been
possible without open primaries
The open primary has not only changed the strategy
of candidates looking to enter the Legislature it
has also changed the way interest groups develop
strategies to elect legislators that best represent their
world views
Californiarsquos business interests have been particularly
savvy in adapting to these changes by adopting
strategies for supporting legislative candidates
that were once unheard of There was once a time
when it was automatic that these business interests
only backed Republican candidates This has
changed particularly in districts with a majority of
Democratic voters
In these districts it is not uncommon to see a
general election featuring two Democrats These
types of races provide a perfect synergy between
Democrats running from a more moderate position
and business interests who see a benefit from having
such political perspectives in the Legislature
This new breed of moderate Democrat would
have found it hard to advance out of a traditional
Democratic primary where the winner was decided
by the hard-core base
In the open primary system a moderate Democrat
can not only survive but thrive making it to the
general election by taking positions that appeal not
just to their fellow Democrats but to decline-to-state
and even moderate Republican voters
While remaining socially liberal like more
traditional Democrats moderates stand apart
by taking firm stances against new taxes and
unnecessary government regulation ndash two views
that align them with business interests
around the state
And the business community
has taken note spending
millions of dollars over the
past few years either in direct
donations to candidates
or the establishment of
political action committees
spending on behalf of
a candidate to elect more
moderate Democrats This has had
a big impact on the Legislature particularly in the
Assembly where the informal but highly influential
Moderate Caucus holds sway
Numbering anywhere from 10 to 15 depending on
who you ask and what is up for a vote on a particular
day this bloc of Democrats led by Assemblymembers
Rudy Salas from Bakersfield and Jim Cooper from
Sacramento have had considerable success helping
the business community in recent years by using
their influence to either water down legislation that
would adversely affect business preventing such
bills from being voted on by the full Assembly
or voting with Republicans to kill anti-business
legislation
Some notable business victories facilitated by the
Moderate Democrats during last yearrsquos legislative
DEM
REP
The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views
Continued from p 17
G O V E R N M E N T R E L AT I O N SCONTINUED
|
CA
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OR
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OC
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18
CA
LIF
OR
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G O V E R N M E N T R E L AT I O N S
session were the defeat of legislation that would
have required a 50 percent reduction in petroleum
use in motor vehicles the preventing of legislation
increasing the minimum wage from being heard on
the Assembly Floor and the preventing of legislation
requiring predictive scheduling from also being
heard on the Assembly Floor among others
Business groups such as CGA and others have
benefitted from supporting the candidacies of
these Moderate Democrats While their support
is certainly not 100 percent even their support 50
to 60 percent of the time is enough to stave off the
seemingly never-ending onslaught of legislation that
has the potential to put a damper on the business
climate in California
Those percentages may not seem like much but
when you consider that without open primaries the
Democrats coming from these same Democratic
majority districts would often stand with business
20 percent of the time or less the value of Moderate
Democrats to business is high
So while the middle of the road in Texas may be
nothing more than road kill armadillos and yellow
stripes the medians in California are wide berths
that provide a cushion for business from forces that
donrsquot necessarily have their best interests in mind
We must all do our part to keep that cushion in
place The election of Moderate Democrats whenever
possible is a great way to do so n
Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto
Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats
July 27-28 2016
Register today at
wwwfresnofoodexpocom
For more information contact
Amy Fuentes at 559-227-9999
or infofresnofoodexpocom
Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much
more than just a trade show The Fresno Food Expo is a celebration of Central
Californiarsquos vibrant food community and a showcase of our regionrsquos most
innovative food and beverage producers
Whether you are sourcing for fresh product deli baked goods or beer and wine
the Fresno Food Expo is your opportunity to connect with local trendsetters and
CEOrsquos behind some of the nationrsquos largest food companies right in their backyard
Come sit at our table and join us for an experience
you wonrsquot find anywhere else
Discover the abundance of Central Californiarsquos Food Region
FREE Buyer Registration
raquo Grower amp Manufacturer Site Tours
raquo VIP Event amp Opening Reception
raquo Buyerrsquos Breakfast
raquo Business to Business Trade Show
Your registration includes access to the following events
FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo
C A P I T O L I N S I D E R
Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program
Californiarsquos Beverage Container Recycling
Program was created by legislation 30 years ago
At that time recycling was a new word and the
intent of the program was to change
consumer habit Glass and aluminum
containers were sold with a surcharge
which the consumer would receive
back if they returned the containers
In that day and age people
commonly purchased six-packs
of glass soda bottles from
their grocery store They were
encouraged to bring those
glass containers back to the
store and exchange them
for the next six-pack they
purchased The convenience
of bringing containers back to
the store was the impetus for
the convenience zones created
by the law
At that time curbside recycling
didnrsquot exist nor were there
any real markets for recycled
material
Over the years a lot has
changed in California
Our communities are different
The definition of convenience
has changed Industries reliant
on manufacturing with recycled
materials have been born and are
thriving Most important we have
changed the Californiarsquos throw away culture to
one focused on recycling and reuse
Yet Californiarsquos Bottle Bill has failed to keep up
with the times
Today the perfect storm is brewing
A number of California communities are revolting
against convenience zone recyclers placing fees
and others obstacles before them in an
effort to keep them away
These recyclers while generating the
majority of containers returned through
the program attract patrons that many
community leaders and grocery store
customers prefer not to see in the
parking lot of their local grocery
store
Petroleum prices have driven the
scrap price for plastic to a historic
low making recycled content more
expensive than virgin product
In addition the formula Cal Recycle
uses to determine the overall cost
of recycling has failed to accurately
capture recent increases in minimum
wage and other cost factors These
three elements combined have made
it nearly impossible for convenience
zone recyclers to remain in business
This is evident by the announcement
from RePlanet the Statersquos largest
convenience zone recycler in late
January to decertify 200 locations in
Northern California
The decertification of convenience
zones starts a process for Cal Recycle
First they are required to review the zones
where each site was located They can either
choose to exempt the zone from further service
or change the status of the zone from served to
unserved
LOUIE BROWN
Partner in the
Sacramento office
of Kahn Soares and
Conway LLP
iStock
|
CA
LIF
OR
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20
C A P I T O L I N S I D E R
The decision to change a zone to unserved triggers an
announcement by Cal Recycle to all dealers in the zone
that they have 30 days to decide to take containers back
in the store or pay the $100 per day ldquoin lieurdquo fee
Cal Recycle is evaluating the zones impacted by the
decertification of RePlanet Since the number of
exempted zones is capped by statute it is expected Cal
Recycle will be forced to change the status on a large
number of zones to unserved and likely impact hundreds
of dealers in northern California This process is expected
to take the next 90 to 120 days to complete
In the meantime CGA and others are developing a
legislative strategy to address these issues before grocers
are required to take action Your legislative team is
focused on a comprehensive solution that takes the
grocer out of the position of the recycler of last resort
along with a number of other changes to bring the
program into 2016 n
iStock
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Dog chow n at u r a l plus vitamins amp minerals
is made with real chicken There ARE no artificial colors
and Yoshiloves itloves itloves it
I makeNO ARTIFICIALCOLORS OR PRESERVATIVES
MADEWITH Real Chicken
ldquo
rdquoBARBARA JDog Chow ProductionDavenport IA
I makeCOLORS OR PRESERVATIVES
New
Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA
reg
P E R S P E C T I V E
Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business
There are several proposed ballot measures that
may be on the November statewide ballot that
would make significant changes to Californiarsquos
minimum wage and tax laws This article takes
a brief look at the four competing tax increase
measures as well as two competing minimum
wage measures
COMPETING TAX INCREASE INITIATIVES FOR
2016 BALLOT
There are four competing tax increase measures
on this yearrsquos ballot They include
n A proposal by the California Hospital
Association and SEIU-UHW that would expand
and make permanent income tax increases
on Californiarsquos highest earners but also allow
Prop 30rsquos sales tax increase to expire in 2016
as scheduled
n A plan by SEIU-UHW and the California
Teachers Association that would extend the
income tax increases under Prop 30 until
2030 and would let the sales tax increase
expire in 2016 as scheduled
n A third measure would impose a significant
surcharge on property valued over $3 million
n A fourth measure would increase the tax on
tobacco products by $2 per pack
ldquoThe School Funding and Budget Stability Act
of 2016rdquo No 15-0065
This measure would extend until 112031 the
personal income tax rates established by Prop
30 and dedicate the funds entirely to schools
without the ability of the Legislature to suspend
or withhold funds even in a state budget crisis
The measure also exempts these funds from
the Statersquos Rainy Day Fund established by voters
in 2014 by Prop 2 (requiring a portion of state
revenues be allocated to the state budget reserve
and to paying down debt)
In Section 3 of the measure the following
statements of purpose and intent are set forth
ldquo(a) The chief purpose of this measure is to
protect our schools by temporarily extending
current income tax rates on wealthy
Californians instead of awarding a huge tax
break to couples earning more than half a
million dollars a year or individuals earning
more than a quarter million Instead of
sending money back into the pockets of the
wealthy this measure sends the money to a
special account that must be spent exclusively
on schools
ldquo(b) This measure is intended to keep California
on a track toward balanced budgets and
reliable funding for schools and community
colleges preventing a new round of
devastating cuts to public education and a
return to the days of chronic budget deficits
and funding cuts
ldquo(c) This measure guarantees in the Constitution
that the revenues it raises for schools will
be sent directly to school districts and
community colleges for classroom expenses
not administrative costs This school funding
cannot be suspended or withheld no matter
what happens with the state budgetrdquo
ldquoThe Invest in Californiarsquos Children Actrdquo
No 15-0070
This measure would make permanent the Prop
30 personal income tax rates after 2019 plus add
additional higher rates for those earning above
$1 million per year (individuals) or $2 million
(married filing jointly) with the highest bracket
of 143 percent and earmark the funds for
CHRIS MICHEL I
Legislative Advocate
Aprea amp Micheli Inc
Continued on p 24
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23
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
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CA
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P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
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Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
CA
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
CA
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WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
iStock
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copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
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Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
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copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
CA
LIF
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NIA
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OC
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
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OR
NIA
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
OR
NIA
GR
OC
ER |
47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
OR
NIA
GR
OC
ER
48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
LIF
OR
NIA
GR
OC
ER |
51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
OR
NIA
GR
OC
ER
52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
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CA
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
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California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
September 25-27 2016Palm Springs California
The grocery industry is rapidly reshaping itself Spurred by emerging technologies and innovative new competitors there is a discernable shift in how food is produced distributed and purchased These evolutionary changes are redefining the industryrsquos traditional values of convenience selection and affordability
Retailers and brands are adapting to these new shopping realities by morphing their businesses through consolidations mergers targeted expansions and incubating new concepts Grocers are creating smaller smarter stores with a more targeted assortment of goods and integrating new technologies into their operations
As a result the new shape of the food industry is efficient decentralized agile and reimagines everything from sourcing and supply chain to sales collaboration and customer loyalty
GATHER LEARN PROFIT
Create a calendar reminder now and plan to join the single largest gathering of California grocery industry executives for three days of knowledge building personalized meetings and engaging social events Explore the issues that are reshaping our industry and learn how to transform your business for the next wave of grocery retailing
The CGA Strategic Conference distinctly blends uncommon educational sessions our signature one-on-one prescheduled meetings and time set aside to connect with colleagues to create one of the most productive industry events of the year
The Conference has an established reputation for presenting genuine thought-leaders who address the emerging trends that will most impact your business Yoursquoll gather tangible insights and unique creative takeaways that you can immediately apply to your business
Our concierge-level meeting services offer you and your team a highly efficient way to book the business-critical appointments you need to justify the time away from your office Blend in social events that are relaxed and approachable and you have the perfect recipe for one of the grocery industryrsquos most successful conferences
SPONSORSHIP OPPORTUNITIES
The CGA Strategic Conference offers a wide variety of sponsorship packages and customized opportunities to promote your companyrsquos products equipment or services Take advantage of this unique opportunity to meet with Californiarsquos top grocery decision makers
As a conference sponsor yoursquoll receive a customized pre-scheduled meeting agenda so whether you are a new niche product or an established national brand the CGA Strategic Conference provides a highly productive forum to meet one-on-one with buyers from Californiarsquos top retail companies
MARK YOUR CALENDAR
ldquoThe CGA Strategic Conference is exceptional in that there are national and regional decision makers from many of the largest CPGs The retailer has the opportunity to network with many of these companies and work at strengthening their relationship This makes the conference so effective and quite unique to be able to develop this many relationships all at one venuerdquo
Kurt EricksonVallarta Supermarkets
ldquoCA GROWN was a first time exhibitorsponsor at the 2015 CGA Strategic Conference and we had meeting success well beyond our wildest expectations We found grocers willing to share stories about their customers growing interest in locally grown products and we are certain that this meeting will be the beginning of long-lasting grocer relationships including retail promotions and more in the years aheadrdquo
Steve Burns
CA GROWN
For complete sponsorship information including a list of participating retailers and sponsorship prospectus contact
Beth Wright
Senior Director Events amp SponsorshipCalifornia Grocers Association(916) 448-3545 | (800) 794-3545Bwrightcagrocerscom
ldquoThe CGA Strategic Conference is exceptional in that there are national and regional decision makers from many of the largest CPGs The retailer has the opportunity to network with many of these companies and work at strengthening their relationship This makes the conference so effective and quite unique to be able to develop this many relationships all at one venuerdquo
Kurt EricksonVallarta Supermarkets
wwwcgastrategicconferencecom
UNIQUE SPONSORSHIPS
We have taken the typical trade show experience and reshaped it into a uniquely productive opportunity to build business with your top customers
Sunday September 25
Illuminators Golf Tournament
Opening General Session
Opening Reception
After-hours Social Event
Monday September 26Monday September 26Monday September 26
Collaborative Share Groups
Opening Remarks and General Session
Pre-Scheduled Business Meetings
Reception amp Illuminators Special Event
Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27Tuesday September 27
Multiple Educational Sessions amp Retailers Spotlight
Pre-scheduled Business Meetings
Luncheon Keynote Address
Illuminators Golf Tournament
Opening General Session
Opening Reception
After-hours Social Event
Collaborative Share Groups
Opening Remarks and General Session Opening Remarks and General Session
Pre-Scheduled Business Meetings
Reception amp Illuminators Special Event
Multiple Educational Sessions amp Retailers Spotlight
Pre-scheduled Business Meetings
Luncheon Keynote Address Luncheon Keynote Address Luncheon Keynote Address Luncheon Keynote Address
C
M
Y
CM
MY
CY
CMY
K
CalGrocer_ReshapeAd_8pdf 1 4416 1120 AM
CHAIRMAN APPOINTMENTS
Kevin Arceneaux Mondelez International Inc
Phil Miller CampS Wholesale Grocers
Dave Jones Kellogg Company
EXECUTIVE COMMITTEE
Chairman of the Board Kevin Konkel Raleyrsquos
First Vice Chair Diana Godfrey Smart amp Final Stores
Second Vice Chair Jim Wallace Albertsons Companies Inc
Treasurer Bob Parriott Twain Harte Market
Secretary Kendra Doyel Ralphs Grocery Company
Immediate Past Chair Joe Falvey Unified Grocers Inc
INDEPENDENT OPERATOR
COMMITTEE CHAIR
DIRECTORS Raul Aguilar Anheuser-Busch InBev
Jon Alden Jelly Belly Candy Co
Renee Amen Super A Foods
Teresa Anaya Northgate Gonzalez Markets
Joe Angulo El Super (Bodega Latina)
Rich Arnold Oberto Brands
Denny Belcastro Kimberly-Clark Corp
Bob Bukovec Tyson Foods Inc
Paul Cooke Nestleacute Purina PetCare
Brent Cotten The Hershey Company
Willie Crocker Bimbo Bakeries USA
Steve Dietz Tonyrsquos Fine Foods
Ted Gardner Rio Ranch Markets
Jon Giannini Nutricion Fundamental Inc
Dick Gong G amp G Supermarket Inc
Robin Graf Whole Foods Market
Ryan Jost Procter amp Gamble
Arthur D Jackson Jr Costco Wholesale
Michel LeClerc North State Grocery Inc
Eric Lindberg Jr Grocery Outlet Inc
Dave Madden MillerCoors
Jonathan Mayes Albertsons Companies Inc
Joe McDonnell Campbell Soup Company
Mark McLean CROSSMARK
Casey McQuaid E amp J Gallo Winery
Mario Mediati The Clorox Company
Lynn Melillo Bristol Farms
Dan Meyer Stater Bros Markets
Hee-Sook Nelson Gelsonrsquos Markets
Nicole Pesco Save Mart Supermarkets
Chris Podesto Food 4 Less (Stockton)Rancho San Miguel Markets
Mike Ridenour The Kraft Heinz Company
Casey Rodacker Mar-Val Food Stores Inc
Dean Ryan Tops Fresh Market
Denny Silva Coca-Cola Refreshments
Doug Todd PepsiCo Inc
Jim Van Gorkom NuCal Foods
Michael Walton Unilever
Kevin Young Youngrsquos Payless Market IGA
C G A | Board of Directors
Dennis Darling Foods Etc
|
CA
LIF
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FEATURESMergers and Acquisitions 2015 was a record year for all merger and acquisition activity and 2016 might hit the same heady heights The reasons are simple and not surprising
Saving the Planet Quietly For years now therersquos been a quiet movement under way on the part of the food industry to save the planet And best of all these sustainability efforts arehellipwell sustainable
Exploring Tomorrow TodayA California-based think tank is exploring global economics generational trends and technological developments to learn more about where and how people will live eat and shop in the future
Foundation Inducts Industry ExecsMore than 600 industry peers family and friends gathered in Costa Mesa Calif Recently to honor three grocery executives inducted into the CGA Educational Foundation Hall of Achievement
COLUMNSPresidentrsquos Message Could Trump Bump Impact Senate Race 4
From The Chair Growing People Growing Grocery 6
Viewpoint ndash Kevin Coupe The Shopping Pate of Least Resistance 8
Capitol Insider Trouble Is Brewing With Californiarsquos Bottle Bill 20
Perspective Competing Ballot Measures to Increase Taxes and Wages 23
Inside the Beltway POS Credit Card Fraud Escalates 28
Washington Report Challenges Continue for EMV Implementation 30
DEPARTMENTSCGA News 10
15 Minutes With 64
Advertiser Index 68
C O N T E N T S | Issue 2
CALIFORNIA GROCERS ASSOCIATION
PresidentCEO Ronald Fong
Senior Vice President Government Relations and Public Policy Keri Askew Bailey
Senior Vice President Business Development amp Marketing Doug Scholz
Vice President Communications Dave Heylen
Controller Gary Brewer
Executive Director CGA Educational FoundationShiloh London
Senior Director Government Relations Aaron Moreno Senior Director Events amp Sponsorship Beth Wright
Director CGA Educational Foundation Brianne Page
California Grocer is the official publication of the California Grocers Association
1215 K Street Suite 700 Sacramento CA 95814 (916) 448-3545 (916) 448-2793 Fax wwwcagrocerscomFor association members subscription is included in membership dues Subscription rate for non-members is $100 and does not include CGA Buyersrsquo Guidecopy 2016 California Grocers Association
Publisher Ronald Fong E-mail rfongcagrocerscom
Editor Dave Heylen E-mail dheylencagrocerscom
Associate Editor Tony Ortega E-mail tortegacagrocerscom
For advertising information contact Tony Ortega E-mail tortegacagrocerscom
38
50
44
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P R E S I D E N T rsquo S M E S S A G E
Could Trump Bump Impact Senate RaceThe 2016 November General Election may be one of the most important and influential in some time In each issue of California Grocer leading up to the General Election I will examine the key national state and local races and their impact on our industry This issue Californiarsquos open Senate seat
Itrsquos been 24 years since the last open seat
Senate election in California Can you remember
who represented California prior to incumbent
Senators Diane Feinstein and Barbara Boxer My
guess is most canrsquot Last year Boxer said she was
throwing in the towel opening the door for a
new senator to be elected in November
Before examining the candidates letrsquos take a
quick look back at how we got here Boxer was
first elected to the Senate in 1992 the same
year Californiarsquos other Senator Diane Feinstein
took office after winning a special election to fill
the term left vacant by the resignation of Pete
Wilson Feinstein was re-elected in 1994 and has
served ever since
On the surface the race for Boxerrsquos seat appears
very low-key Itrsquos a safe bet that a Democrat
will retain this seat (Democrats enjoy an
overwhelming advantage right now in California)
And right now there is one clear leader in the
race Who challenges the frontrunner depends
on what happens in the June 7 primary Before I
explain letrsquos first look at the leading candidates
On the Democratic side California Attorney
General Kamala Harris and Congresswoman
Loretta Sanchez (46-CA) are the two top
frontrunners
As we go to press Harris enjoys a comfortable
lead over both her nearest party rival and
Republican challengers She has garnered the
endorsements of the California Democratic Party
State Controller Betty Yee State Treasurer John
Chiang Assembly Speaker Anthony Rendon and
the SEIU California to name a few Her total
campaign contribution nearly triples that of her
nearest contender Loretta Sanchez Harris would
be the first Indian-American and only the second
African-American woman senator
So what could make the June primary interesting
California uses a ldquojungle primaryrdquo system that
pits all candidates against each other regardless
of party in a primary race The top vote getters
go on to the general election
So while Harris appears a shoe-in for the
November ballot Sanchez is in danger of missing
the cut (not securing the second highest number
of votes in June) and watching the November
elections from the sidelines
A united Republican party is Sanchezrsquos biggest
concern If one GOP candidate runs in the
primary the party could steal the second
General Election ballot spot from Sanchez The
GOP took a major step in this direction when
Republican Senate candidate Rocky Chavez an
Oceanside assemblyman dropped out of the
race in early February
If Sanchez manages to secure the other ballot
spot this could set up a very interesting election
come November While Harrisrsquo numbers are
still considerably higher Sanchez stands to
become the first-ever Hispanic US Senator from
California a prospect that might have significant
appeal to the statersquos ever-growing Hispanic
population Sanchez also is considered more of a
moderate while Harris is seen as a solid liberal
The GOP on the other hand has not won a
Senate race in California since 1988 and any
contender will suffer the additional handicap
of running when the Democratic presidential
nominee is sure to carry California by a wide
margin maybe The wild card continues to be
RONALD FONG
PresidentCEO
|
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OR
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4
Donald Trump and his ability to rally the Republican
vote
The top Republican candidates include former state
GOP chair Tom Del Beccaro and George ldquoDufrdquo
Sundheim The GOP field got a little more crowded in
early March with wealthy Silicon Valley businessman
Ron Unz throwing his hat in the ring Unz ran for
Californian governor in 1994 and is probably best
know for authoring Proposition 227 which effectively
eliminated bilingual education in California
Even with a Trump ldquobumprdquo the chances of a Republican
securing Boxerrsquos seat seems like a long shot at best
The real question appears to be whether a more
conservative Democrat or a long-shot Republican
has any real chance of defeating Kamala Harris
Stay tuned n
Nielsen database-latest 52 weeks ending 41115
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F R O M T H E C H A I R
Growing People Growing GroceryCultivating the next generation of grocery leaders is a noble challenge worthy of our time energy and resources
The grocery business is an integral part of my
life I started working as a courtesy clerk at Bel
Air Market when I was 16 and joined Raleyrsquos
when the company was purchased in 1993
Sometimes the workplace was like a family
reunion for me ndash as many as 11 of my relatives
worked at Raleyrsquos or Bel Air at one point or
another Yoursquod probably describe my family as
having ldquogroceryrdquo in our blood
Irsquove stayed in the business because of the endless
doors of opportunity Prepared or perhaps
not I chose to walk through them and couldnrsquot
imagine working in any other industry Being in
the grocery business soon became my destiny
and I love what we do and who we serve
Of course working and growing the industry
isnrsquot limited to stocking products or managing
a department or supporting stores from the
corporate office We need produce buyers
growers farmers and manufacturers to provide
the food distributors and shippers to move it
from place to place and chefs to provide culinary
inspiration to create new in-store environments
for enjoying food
There are countless opportunities for young
people to join our industry and have a long
rewarding career but itrsquos up to us to find and
inspire them
How do we do that By connecting with young
people and providing resources to support them
in their pursuits
Letrsquos start by promoting STEM education ndash
Science Technology Engineering and Math ndash
for every student We need to fund scholarships
that make it easier for young people to advance
their learning
Our CGA Educational Foundation has supported
thousands of students in their educational
endeavors But most importantly by mentoring
the emerging stars in our communities and
sharing with them our success stories in the
grocery industry
CGA recently celebrated the careers of three
industry veterans Rob McDougall Donna
Tyndall and Bruce Wyatt at our annual Hall
of Achievement dinner They are outstanding
examples of leaders who have personally
invested their time talents and resources into
growing people who grow our companies and
our industry
Many companies in our great industry are
finding innovative ways to educate the industry
At Raleyrsquos wersquore reaching the next generation
through a program called ldquoWhere Your Food
Grows and Grazesrdquo which we developed
in cooperation with local ranchers and the
California Rangeland Trust
Students spend time on a ranch learning how
livestock are cared for and produce is grown and
then they tour one of our stores to find out more
about nutrition and our role in making fresh food
available to them Our goals are to inspire young
people to make good food choices and to share
our industryrsquos opportunities with them
Like farmers our job is to cultivate new talent
and watch it sprout The next generation of
leaders and innovators are out there waiting
for us to inspire them We can help this next
generation blossom grow and reap a harvest n
KEVIN KONKELCGA Chair of the Board
Senior Vice President Store Operations
Raleyrsquos Family of Fine Stores
|
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Grocery Operations We Smooth lsquoem Out
Operational Eciency Greater Convenience More Money in Your Pocket
Cart Retrieval The industry leader in
shopping cart retrieval Reduce cart-loss expenses
and aggravation Detailed reporting from
an accountable partner
Because we understand the details of grocery operations we can save you money and aggravation dealing with things youd rather not have to Come to us to simplify your operations and save money
Cart Maintenance Reduce cart cleaning and
maintenance costs Lower new cart acquisition
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Coupon Redemption Receive and reinvest manufacturer
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one-stop convenience Zero upfront costs or counting
and sorting hassles
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CSCRC and CCRC are RMS companies ndash 1020 North Lake St Burbank CA 91502
FOLLOW US ON SOCIAL MEDIA
wwwcartretrievalnet
V I E W P O I N T
The Shopping Path of Least Resistance It isnrsquot quite the replicator technology fantasized about by ldquoStar Trekrdquo ndash with which one could just say ldquoEarly Grey Hotrdquo to a computer and it would magically appear ndash but that doesnrsquot mean it canrsquot ndash and wonrsquot ndash change the world
The fact is I think it has the potential to do both
Earlier this year we learned that Samsung
had unveiled a new refrigerator at the annual
Consumer Electronics Show (CES) in Las Vegas
But this wasnrsquot just a refrigerator It was a
ldquosmartrdquo refrigerator
Called the Family Hub Refrigerator this piece of
equipment comes with a 215-inch touchscreen
on one of its doors which people can use
to shop for products as they run low or out
Even more impressive the refrigerator also has
cameras inside that keep track of products as
they are removed so it can let people know
when supplies are running low And people
can access all this information from their smart
phones and use them to place orders
Wow Irsquom old enough to remember when
refrigerators didnrsquot even have automatic
defrosting (Young people reading this will have
to trust me on this We used to have to unplug
freezers and refrigerators and put pots of hot
water inside in order to defrost them It was a
total pain in the neck but a routine part of life
(Barbaric huh)
Samsung said that it has partnered with
MasterCard to provide payment services and
to start with MyWebGrocer FreshDirect and
ShopRite for online grocery ordering Needless
to say these platforms are thrilled
ldquoCommerce-enabled devices like the Family
Hub refrigerator represent an unprecedented
opportunity for our customers because it puts
them right where the consumer path to purchase
begins in the kitchenrdquo said Eric Healy president
of MyWebGrocer And Jodi Kahn FreshDirectrsquos
Chief Consumer Officer observed that it created
a ldquofrictionlessrdquo and ldquoseamlessrdquo road between
shopper and shop
Bingo
Not long after Samsung made its announcement
I got an email from Amazon promoting a new
item available on the site ndash a Brita water pitcher
that comes with a filter that enables the consumer
to have cleaner better-tasting water
Except that this was a pitcher with a curveball
ndash because this Brita pitcher is WiFi enabled
KEVIN COUPEFounder
MorningNewsBeatcom
Commerce-enabled devices like the Family Hub Refrigerator represent an unprecedented opportunity for our customers because it puts them right where the consumer path to purchasebegins in the kitchen
iStock
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LIF
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OC
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8
V I E W P O I N T
It comes the email said ldquoequipped with a built-in
counter that tracks the amount of water that passes
through the pitcherrsquos filter The pitcher itself will
automatically order a new filter through Amazon Dash
Replenishment when the old filter nears its capacity
This new connected pitcher with Amazon Dash
Replenishment gives Brita owners exactly what they
want ndash a new Brita filter on their doorstep at the time
they need itrdquo
Pretty cool
(Irsquom tempted here to tell younger readers that I can
remember a time when we had to fetch water from
the well with a bucket and a rope but Irsquom not quite
that old)
The Brita Infinity Pitcher will cost about 45 bucks
which seems to be about a third more expensive than
most of the Brita pitchers that I found on Amazon
but the argument is that the tech-driven convenience
will make the price difference palatable And I have to
say that I think the argument is pretty compelling Or
to coin a phrase it is an argument that holds water
Innovations along these lines have been much
discussed over the years and it only was a matter of
time before dreams and reality met in such a way
that products like these could become mainstream
Without a doubt wersquore pretty much there products
like the Family Hub Refrigerator or Amazonrsquos
ecosystem-centric strategies (which are tied to the
Echo Subscribe-and-Save the Dash replenishment
system and even the delivery drones that probably
will be flying over our homes one of these days) are
putting us right in the middle of what could turn out
to be a pretty remarkable time And retailers have to
be prepared to embrace this revolution which almost
certainly will unfold faster than anyone expects
Interestingly Ford and Amazon announced at CES that
they are working on an initiative ldquogranting Ford owners
unprecedented access to their connected-home devices
from their cars and vice versardquo
And the Amazon ecosystem expands a little more
What is important to remember here is that once one
buys a refrigerator or a water pitcher it usually will be
quite some time before you have to replace them The
refrigerator only has value if it is filled with food that
you want to eat and the pitcher only has value if you
have the filters that create cleaner tastier water And
so it is critical for companies like Samsung and Brita
to find ways to be more relevant and useful which is
exactly what theyrsquove done
One of the things that traditional retailers have to
realize is that the advent of smart appliances and the
expanding ecosystems being created by some retailer
platforms ndash especially but not limited to Amazon ndash
are combining to create an environment in which it
is less and less necessary for people to actually go to
the store These progressive-minded companies are
creating paths of least resistance that provide few
reasons for consumers to detour elsewhere
Not everybody and not all the time But enough to
have an impact on a lot of bottom lines
One of the things that one finds a lot at food industry
conferences is people who like to cast doubt on the
e-revolution They like to talk about the people who
still want to go to the store about the hiccups that
can affect click-and-collect or delivery services about
how rural customers have different needs than urban
customers and about how selling points like ldquoyour
neighborhood grocerrdquo or ldquohometown proudrdquo or
ldquoold-fashioned servicerdquo or similar tropes are enough
for retailers to hang their hats on when competing in
this new environment
All of this may in fact be true And still not enough
to stave off the impact of technology especially on a
generation of shoppers that does not remember those
ancient pre-Amazon days
Not all people and not all the time But enough to
create leaks in the traditional market shares of a lot
of retailers and manufacturers Leaks that are likely to
grow bigger with time
The future is coming And it is traveling at Warp Eight n
One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution
CA
LIF
OR
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A N
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AL
IFO
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Grocers Converge on Sacramento
Grocery retailers and their supplier partners from
throughout California gathered in Sacramento in
late March to share business concerns with their
state representatives on key issues facing the
grocery industry
The face-to-face meetings with the majority of state
legislators highlighted the 2016 CGA Grocers Day
at the Capitol the Associationrsquos one-day member
advocacy event at the Statersquos Capitol
ldquoThis was a critical year for our members to
participate in CGArsquos premier member lobbying
activityrdquo said CGA President Ron Fong ldquoOur
members really stepped up and did a tremendous job
of sharing our story and providing valuable insight
into how our businesses operaterdquo
In addition to the face-to-face meetings attendees
heard from Gov Jerry Brown who addressed a
number of topics including the deal struck with labor
leaders over Easter weekend to introduce legislation
that will raise the statersquos minimum wage to $15
The governor said a deal needed to be struck as
an alternative to a minimum wage proposition
on the November ballot that would be even more
burdensome on Californiarsquos business community
The Governorrsquos remarks were met with skepticism
by the Association who later released a statement
chiding the governor for not including the business
community in its meeting with labor
ldquoOur members are dismayed at the events of the
past three daysrdquo Fong said in a written statement to
the media ldquoMajority Democrats and the Governor
(l to r) Jonathan Mayes Albertsons Kendra Doyel Ralphs Gov Jerry Brown Diana Godfrey Smart amp Final Ron Fong CGA
(l to r) Charla Giles Save Mart Supermarket Assemblymember Rudy Salas Michel LeClerc North State Grocery Inc Dave Madden MillerCoors
(l to r) Sen Richard Roth Mary Connelly Costco Eric Lindberg Jr Grocery Outlet Inc
CG
A N
EW
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IFO
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11
rammed a $5 increase in Californiarsquos minimum
wage through the entire legislative process in
just three days They did so without meaningful
conversation or an opportunity for businesses that
will bear the cost burden to weigh in on the issuerdquo
Attendees were also briefed by CGA staff on the key
issues they would discuss during their legislative
visits These topics included employee scheduling
wine coupons food bank donation tax credits and
the statersquos beleaguered beverage container recycling
program
Following an afternoon of legislative meetings
CGA hosted its annual Presidentrsquos Reception that
allowed Grocers Day attendees to meet again with
state legislators and staff but in a more relaxed
environment
CGA also hosted its popular Ice Cream Social
located this year inside the State Capitol and was
sponsored by Clover Stornetta Farms which provided
the ice cream n
The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day
Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc
Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc
Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final
Breakfast Kellogg Company Save Mart Supermarkets
Luncheon Jelly Belly Candy Co
Ice Cream Social Clover Stornetta Farms Inc
Presidentrsquos Reception Command Packaging MillerCoors
Legislative visits highlighted CGArsquos Grocers Day at the Capitol
Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social
Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA
CG
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IFO
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Foundation Selects New Trustee ChairBrad Askeland Vice President
Holiday Markets has
been elected Chair of the
California Grocers Association
Educational Foundation
Board of Trustees Askeland
had previously served as
Foundation Vice Chair
Askeland succeeds former CGAEF Chair Jim Van
Gorkom NuCal Foods who served in that position
since 2011 Mark Johnson Unified Grocers Inc was
elected to replace Askeland as the Boardrsquos Vice Chair
Jacquie Slobom Gelsonrsquos Markets and Jerry Landers
Raleyrsquos will continue as the Foundationrsquos Secretary
and Treasurer respectively
ldquoWe look forward to Brad building on the programs
Jim was instrumental in fosteringrdquo said CGAEF
President Ron Fong
Askelandrsquos responsibilities will be to guide and direct
the CGAEF Board of Trustees The Foundation
was created in 1992 to advance Californiarsquos grocery
industry through employee education industry
research and recognition of excellence
Askeland who has served as a Trustee since 2009
began his grocery career in 1988 as a courtesy clerk
for a small independent market before joining
North State Grocery Inc in 1995 He managed
several stores before being named director of human
resources in 2003 n
SEC Store Tour Features Draegerrsquos MarketThe California
Grocers Associationrsquo
Supplier Executive
Council kicked off
its 2016 Store Tour
series in March at
Draegerrsquos Market in
San Mateo The tour
was led by Richard
Draeger chief
operations officer
for the company
The Draeger executive led the SEC members on an
aisle-by-aisle tour sharing his companyrsquos business
philosophy and strategy Draeger told attendees that
for his company itrsquos not about having the lowest
prices but ldquomaking things easier for the consumerrdquo
He added that shopping local is what makes
Draegerrsquos different
Following the tour SEC members were treated to
a luncheon hosted by Draegerrsquos popular in-store
cooking school To learn more about becoming
an SEC member contact Sunny Porter CGA
at (916) 448-3545 n
New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER
Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes
Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom
Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo
2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916
The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals
CMYKFOCUS ON ALLERGENSTopical educational sessions and resources
June 5 - 7 | Houston
FOR MORE INFORMATION IDDBAORG 6083105000
REGISTER TODAYEXPANDED EXPO HOURS
NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths
SHOW amp SELL CENTERCAKE DECORATING CHALLENGE
MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH
JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain
CG
A N
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IFO
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CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in
March the second ldquotoolrdquo in its Grocery Compliance
Toolkit ndash this one focused on the Americans with
Disabilities Act
CGA contracted with the Sacramento-based law firm
of Downey Brand LLP to create a comprehensive
user-friendly ADA compliance guideline In addition
CGA hosted two regional seminars in conjunction
with the release of the ADA compliance ldquotoolrdquo In
addition the CGA Educational Foundation hosted a
one-hour webinar conducted by Downey Brand that
outlined the specifics of complying with the ADA
ldquoCalifornia grocers are increasingly seen as great
targets for opportunistic drive-by ADA public
access lawsuitsrdquo said CGA President Ron Fong
ldquoDespite recent changes to law serial plaintiffs
continue to send demand letters and file frivolous
lawsuits against grocers in an attempt to extract
monetary settlements We created this toolkit to
help retailers fend off these lawsuitsrdquo
The Grocery Compliance Toolkit was created as
a CGA member benefit to help grocery retailers
understand and manage the risks associated with
complying with state regulations related to the
grocery industry
The first ldquotoolrdquo was released last year and focused
on hazardous waste disposal
CGA members can download both the ADA and
hazardous waste disposal ldquotoolsrdquo from CGArsquos website
wwwcagrocerscom along with viewing both
seminars
CGA will release additional compliance ldquotoolsrdquo in the
coming months n
2014 2015
Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM
Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years
VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA
SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION
For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute
llaacutemenos o visite nuestra pagina de internet
Variety is the spice of lifeEnjoy it with our award winning
premium authentic line of cheeses
While that may hold true in the Lone Star State our
friends from Texas may be shocked to find that the
middle of the road in California is a relatively safe
place to be But finding safety on those center lines
wasnrsquot always so easy
Open primaries and the rise of the moderates
particularly on the Democratic side of the aisle have
widened that middle of the road from a dangerously
thin series of narrow yellow stripes to a ten-foot
wide median safe from most passing traffic
In a nation that divides its states into a red column
(for Republicans) and a blue column (for Democrats)
California exists solidly in the blue column with
Democrats holding every statewide office as well as
near supermajorities in both legislative houses
However a closer look reveals unexpected patches of
purple dotting the political map
Within these purple areas are a number of legislative
districts that reflect a uniquely Californian political
identity ndash a laissez faire attitude on social issues
mixed with a more conservative middle-of-the-road
view towards taxes and regulation
It was the voters in these areas the backers of
Proposition 14 had in mind back in 2010 when they
successfully pressed for passage of this initiative
to bring open primaries to California effectively
changing the game of legislative elections in our state
The rationale for passage was simple
In an overall political climate that often forced
candidates to the far-left and far-right during
primary elections in order to cater to the base to
win their partyrsquos nomination the general election
would often leave middle-of-the-road voters from
both parties (as well as independents) with no viable
candidates to support
GO
VE
RN
ME
NT
RE
LA
TIO
NS
Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD
BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo
In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses
Continued on p 18
Aaron Moreno Senior Director
Government Relations CGA
iStock
CA
LIF
OR
NIA
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OC
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If all candidates stood for primary election at the
same time with all voters choosing the top-two vote
getters for the general election regardless of party
open primary backers reasoned that candidates
would have to broaden their appeal to all voters in
a legislative district not to just the ldquotrue believersrdquo
who often decided primary elections The result
would be more moderate legislators be they
Democrat or Republican
This has been the case as
illustrated by the elections
of Republicans Catherine
Baker and David Hadley
in Assembly districts that
had elected Democrats in
previous election cycles Both
won due to their willingness
and ability to speak to voters from
both parties from the primary all the way
to the general election This would not have been
possible without open primaries
The open primary has not only changed the strategy
of candidates looking to enter the Legislature it
has also changed the way interest groups develop
strategies to elect legislators that best represent their
world views
Californiarsquos business interests have been particularly
savvy in adapting to these changes by adopting
strategies for supporting legislative candidates
that were once unheard of There was once a time
when it was automatic that these business interests
only backed Republican candidates This has
changed particularly in districts with a majority of
Democratic voters
In these districts it is not uncommon to see a
general election featuring two Democrats These
types of races provide a perfect synergy between
Democrats running from a more moderate position
and business interests who see a benefit from having
such political perspectives in the Legislature
This new breed of moderate Democrat would
have found it hard to advance out of a traditional
Democratic primary where the winner was decided
by the hard-core base
In the open primary system a moderate Democrat
can not only survive but thrive making it to the
general election by taking positions that appeal not
just to their fellow Democrats but to decline-to-state
and even moderate Republican voters
While remaining socially liberal like more
traditional Democrats moderates stand apart
by taking firm stances against new taxes and
unnecessary government regulation ndash two views
that align them with business interests
around the state
And the business community
has taken note spending
millions of dollars over the
past few years either in direct
donations to candidates
or the establishment of
political action committees
spending on behalf of
a candidate to elect more
moderate Democrats This has had
a big impact on the Legislature particularly in the
Assembly where the informal but highly influential
Moderate Caucus holds sway
Numbering anywhere from 10 to 15 depending on
who you ask and what is up for a vote on a particular
day this bloc of Democrats led by Assemblymembers
Rudy Salas from Bakersfield and Jim Cooper from
Sacramento have had considerable success helping
the business community in recent years by using
their influence to either water down legislation that
would adversely affect business preventing such
bills from being voted on by the full Assembly
or voting with Republicans to kill anti-business
legislation
Some notable business victories facilitated by the
Moderate Democrats during last yearrsquos legislative
DEM
REP
The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views
Continued from p 17
G O V E R N M E N T R E L AT I O N SCONTINUED
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G O V E R N M E N T R E L AT I O N S
session were the defeat of legislation that would
have required a 50 percent reduction in petroleum
use in motor vehicles the preventing of legislation
increasing the minimum wage from being heard on
the Assembly Floor and the preventing of legislation
requiring predictive scheduling from also being
heard on the Assembly Floor among others
Business groups such as CGA and others have
benefitted from supporting the candidacies of
these Moderate Democrats While their support
is certainly not 100 percent even their support 50
to 60 percent of the time is enough to stave off the
seemingly never-ending onslaught of legislation that
has the potential to put a damper on the business
climate in California
Those percentages may not seem like much but
when you consider that without open primaries the
Democrats coming from these same Democratic
majority districts would often stand with business
20 percent of the time or less the value of Moderate
Democrats to business is high
So while the middle of the road in Texas may be
nothing more than road kill armadillos and yellow
stripes the medians in California are wide berths
that provide a cushion for business from forces that
donrsquot necessarily have their best interests in mind
We must all do our part to keep that cushion in
place The election of Moderate Democrats whenever
possible is a great way to do so n
Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto
Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats
July 27-28 2016
Register today at
wwwfresnofoodexpocom
For more information contact
Amy Fuentes at 559-227-9999
or infofresnofoodexpocom
Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much
more than just a trade show The Fresno Food Expo is a celebration of Central
Californiarsquos vibrant food community and a showcase of our regionrsquos most
innovative food and beverage producers
Whether you are sourcing for fresh product deli baked goods or beer and wine
the Fresno Food Expo is your opportunity to connect with local trendsetters and
CEOrsquos behind some of the nationrsquos largest food companies right in their backyard
Come sit at our table and join us for an experience
you wonrsquot find anywhere else
Discover the abundance of Central Californiarsquos Food Region
FREE Buyer Registration
raquo Grower amp Manufacturer Site Tours
raquo VIP Event amp Opening Reception
raquo Buyerrsquos Breakfast
raquo Business to Business Trade Show
Your registration includes access to the following events
FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo
C A P I T O L I N S I D E R
Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program
Californiarsquos Beverage Container Recycling
Program was created by legislation 30 years ago
At that time recycling was a new word and the
intent of the program was to change
consumer habit Glass and aluminum
containers were sold with a surcharge
which the consumer would receive
back if they returned the containers
In that day and age people
commonly purchased six-packs
of glass soda bottles from
their grocery store They were
encouraged to bring those
glass containers back to the
store and exchange them
for the next six-pack they
purchased The convenience
of bringing containers back to
the store was the impetus for
the convenience zones created
by the law
At that time curbside recycling
didnrsquot exist nor were there
any real markets for recycled
material
Over the years a lot has
changed in California
Our communities are different
The definition of convenience
has changed Industries reliant
on manufacturing with recycled
materials have been born and are
thriving Most important we have
changed the Californiarsquos throw away culture to
one focused on recycling and reuse
Yet Californiarsquos Bottle Bill has failed to keep up
with the times
Today the perfect storm is brewing
A number of California communities are revolting
against convenience zone recyclers placing fees
and others obstacles before them in an
effort to keep them away
These recyclers while generating the
majority of containers returned through
the program attract patrons that many
community leaders and grocery store
customers prefer not to see in the
parking lot of their local grocery
store
Petroleum prices have driven the
scrap price for plastic to a historic
low making recycled content more
expensive than virgin product
In addition the formula Cal Recycle
uses to determine the overall cost
of recycling has failed to accurately
capture recent increases in minimum
wage and other cost factors These
three elements combined have made
it nearly impossible for convenience
zone recyclers to remain in business
This is evident by the announcement
from RePlanet the Statersquos largest
convenience zone recycler in late
January to decertify 200 locations in
Northern California
The decertification of convenience
zones starts a process for Cal Recycle
First they are required to review the zones
where each site was located They can either
choose to exempt the zone from further service
or change the status of the zone from served to
unserved
LOUIE BROWN
Partner in the
Sacramento office
of Kahn Soares and
Conway LLP
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C A P I T O L I N S I D E R
The decision to change a zone to unserved triggers an
announcement by Cal Recycle to all dealers in the zone
that they have 30 days to decide to take containers back
in the store or pay the $100 per day ldquoin lieurdquo fee
Cal Recycle is evaluating the zones impacted by the
decertification of RePlanet Since the number of
exempted zones is capped by statute it is expected Cal
Recycle will be forced to change the status on a large
number of zones to unserved and likely impact hundreds
of dealers in northern California This process is expected
to take the next 90 to 120 days to complete
In the meantime CGA and others are developing a
legislative strategy to address these issues before grocers
are required to take action Your legislative team is
focused on a comprehensive solution that takes the
grocer out of the position of the recycler of last resort
along with a number of other changes to bring the
program into 2016 n
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21
Dog chow n at u r a l plus vitamins amp minerals
is made with real chicken There ARE no artificial colors
and Yoshiloves itloves itloves it
I makeNO ARTIFICIALCOLORS OR PRESERVATIVES
MADEWITH Real Chicken
ldquo
rdquoBARBARA JDog Chow ProductionDavenport IA
I makeCOLORS OR PRESERVATIVES
New
Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA
reg
P E R S P E C T I V E
Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business
There are several proposed ballot measures that
may be on the November statewide ballot that
would make significant changes to Californiarsquos
minimum wage and tax laws This article takes
a brief look at the four competing tax increase
measures as well as two competing minimum
wage measures
COMPETING TAX INCREASE INITIATIVES FOR
2016 BALLOT
There are four competing tax increase measures
on this yearrsquos ballot They include
n A proposal by the California Hospital
Association and SEIU-UHW that would expand
and make permanent income tax increases
on Californiarsquos highest earners but also allow
Prop 30rsquos sales tax increase to expire in 2016
as scheduled
n A plan by SEIU-UHW and the California
Teachers Association that would extend the
income tax increases under Prop 30 until
2030 and would let the sales tax increase
expire in 2016 as scheduled
n A third measure would impose a significant
surcharge on property valued over $3 million
n A fourth measure would increase the tax on
tobacco products by $2 per pack
ldquoThe School Funding and Budget Stability Act
of 2016rdquo No 15-0065
This measure would extend until 112031 the
personal income tax rates established by Prop
30 and dedicate the funds entirely to schools
without the ability of the Legislature to suspend
or withhold funds even in a state budget crisis
The measure also exempts these funds from
the Statersquos Rainy Day Fund established by voters
in 2014 by Prop 2 (requiring a portion of state
revenues be allocated to the state budget reserve
and to paying down debt)
In Section 3 of the measure the following
statements of purpose and intent are set forth
ldquo(a) The chief purpose of this measure is to
protect our schools by temporarily extending
current income tax rates on wealthy
Californians instead of awarding a huge tax
break to couples earning more than half a
million dollars a year or individuals earning
more than a quarter million Instead of
sending money back into the pockets of the
wealthy this measure sends the money to a
special account that must be spent exclusively
on schools
ldquo(b) This measure is intended to keep California
on a track toward balanced budgets and
reliable funding for schools and community
colleges preventing a new round of
devastating cuts to public education and a
return to the days of chronic budget deficits
and funding cuts
ldquo(c) This measure guarantees in the Constitution
that the revenues it raises for schools will
be sent directly to school districts and
community colleges for classroom expenses
not administrative costs This school funding
cannot be suspended or withheld no matter
what happens with the state budgetrdquo
ldquoThe Invest in Californiarsquos Children Actrdquo
No 15-0070
This measure would make permanent the Prop
30 personal income tax rates after 2019 plus add
additional higher rates for those earning above
$1 million per year (individuals) or $2 million
(married filing jointly) with the highest bracket
of 143 percent and earmark the funds for
CHRIS MICHEL I
Legislative Advocate
Aprea amp Micheli Inc
Continued on p 24
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23
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
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CA
LIF
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24
P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
|
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26
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Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
CA
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WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
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copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
LUM
INA
TO
RS
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Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
|
CA
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
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NIA
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OC
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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GR
OC
ER |
39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
CA
LIF
OR
NIA
GR
OC
ER
40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
CA
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
LIF
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NIA
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OC
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
NIA
GR
OC
ER
46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
OR
NIA
GR
OC
ER |
47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
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CA
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
CHAIRMAN APPOINTMENTS
Kevin Arceneaux Mondelez International Inc
Phil Miller CampS Wholesale Grocers
Dave Jones Kellogg Company
EXECUTIVE COMMITTEE
Chairman of the Board Kevin Konkel Raleyrsquos
First Vice Chair Diana Godfrey Smart amp Final Stores
Second Vice Chair Jim Wallace Albertsons Companies Inc
Treasurer Bob Parriott Twain Harte Market
Secretary Kendra Doyel Ralphs Grocery Company
Immediate Past Chair Joe Falvey Unified Grocers Inc
INDEPENDENT OPERATOR
COMMITTEE CHAIR
DIRECTORS Raul Aguilar Anheuser-Busch InBev
Jon Alden Jelly Belly Candy Co
Renee Amen Super A Foods
Teresa Anaya Northgate Gonzalez Markets
Joe Angulo El Super (Bodega Latina)
Rich Arnold Oberto Brands
Denny Belcastro Kimberly-Clark Corp
Bob Bukovec Tyson Foods Inc
Paul Cooke Nestleacute Purina PetCare
Brent Cotten The Hershey Company
Willie Crocker Bimbo Bakeries USA
Steve Dietz Tonyrsquos Fine Foods
Ted Gardner Rio Ranch Markets
Jon Giannini Nutricion Fundamental Inc
Dick Gong G amp G Supermarket Inc
Robin Graf Whole Foods Market
Ryan Jost Procter amp Gamble
Arthur D Jackson Jr Costco Wholesale
Michel LeClerc North State Grocery Inc
Eric Lindberg Jr Grocery Outlet Inc
Dave Madden MillerCoors
Jonathan Mayes Albertsons Companies Inc
Joe McDonnell Campbell Soup Company
Mark McLean CROSSMARK
Casey McQuaid E amp J Gallo Winery
Mario Mediati The Clorox Company
Lynn Melillo Bristol Farms
Dan Meyer Stater Bros Markets
Hee-Sook Nelson Gelsonrsquos Markets
Nicole Pesco Save Mart Supermarkets
Chris Podesto Food 4 Less (Stockton)Rancho San Miguel Markets
Mike Ridenour The Kraft Heinz Company
Casey Rodacker Mar-Val Food Stores Inc
Dean Ryan Tops Fresh Market
Denny Silva Coca-Cola Refreshments
Doug Todd PepsiCo Inc
Jim Van Gorkom NuCal Foods
Michael Walton Unilever
Kevin Young Youngrsquos Payless Market IGA
C G A | Board of Directors
Dennis Darling Foods Etc
|
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FEATURESMergers and Acquisitions 2015 was a record year for all merger and acquisition activity and 2016 might hit the same heady heights The reasons are simple and not surprising
Saving the Planet Quietly For years now therersquos been a quiet movement under way on the part of the food industry to save the planet And best of all these sustainability efforts arehellipwell sustainable
Exploring Tomorrow TodayA California-based think tank is exploring global economics generational trends and technological developments to learn more about where and how people will live eat and shop in the future
Foundation Inducts Industry ExecsMore than 600 industry peers family and friends gathered in Costa Mesa Calif Recently to honor three grocery executives inducted into the CGA Educational Foundation Hall of Achievement
COLUMNSPresidentrsquos Message Could Trump Bump Impact Senate Race 4
From The Chair Growing People Growing Grocery 6
Viewpoint ndash Kevin Coupe The Shopping Pate of Least Resistance 8
Capitol Insider Trouble Is Brewing With Californiarsquos Bottle Bill 20
Perspective Competing Ballot Measures to Increase Taxes and Wages 23
Inside the Beltway POS Credit Card Fraud Escalates 28
Washington Report Challenges Continue for EMV Implementation 30
DEPARTMENTSCGA News 10
15 Minutes With 64
Advertiser Index 68
C O N T E N T S | Issue 2
CALIFORNIA GROCERS ASSOCIATION
PresidentCEO Ronald Fong
Senior Vice President Government Relations and Public Policy Keri Askew Bailey
Senior Vice President Business Development amp Marketing Doug Scholz
Vice President Communications Dave Heylen
Controller Gary Brewer
Executive Director CGA Educational FoundationShiloh London
Senior Director Government Relations Aaron Moreno Senior Director Events amp Sponsorship Beth Wright
Director CGA Educational Foundation Brianne Page
California Grocer is the official publication of the California Grocers Association
1215 K Street Suite 700 Sacramento CA 95814 (916) 448-3545 (916) 448-2793 Fax wwwcagrocerscomFor association members subscription is included in membership dues Subscription rate for non-members is $100 and does not include CGA Buyersrsquo Guidecopy 2016 California Grocers Association
Publisher Ronald Fong E-mail rfongcagrocerscom
Editor Dave Heylen E-mail dheylencagrocerscom
Associate Editor Tony Ortega E-mail tortegacagrocerscom
For advertising information contact Tony Ortega E-mail tortegacagrocerscom
38
50
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P R E S I D E N T rsquo S M E S S A G E
Could Trump Bump Impact Senate RaceThe 2016 November General Election may be one of the most important and influential in some time In each issue of California Grocer leading up to the General Election I will examine the key national state and local races and their impact on our industry This issue Californiarsquos open Senate seat
Itrsquos been 24 years since the last open seat
Senate election in California Can you remember
who represented California prior to incumbent
Senators Diane Feinstein and Barbara Boxer My
guess is most canrsquot Last year Boxer said she was
throwing in the towel opening the door for a
new senator to be elected in November
Before examining the candidates letrsquos take a
quick look back at how we got here Boxer was
first elected to the Senate in 1992 the same
year Californiarsquos other Senator Diane Feinstein
took office after winning a special election to fill
the term left vacant by the resignation of Pete
Wilson Feinstein was re-elected in 1994 and has
served ever since
On the surface the race for Boxerrsquos seat appears
very low-key Itrsquos a safe bet that a Democrat
will retain this seat (Democrats enjoy an
overwhelming advantage right now in California)
And right now there is one clear leader in the
race Who challenges the frontrunner depends
on what happens in the June 7 primary Before I
explain letrsquos first look at the leading candidates
On the Democratic side California Attorney
General Kamala Harris and Congresswoman
Loretta Sanchez (46-CA) are the two top
frontrunners
As we go to press Harris enjoys a comfortable
lead over both her nearest party rival and
Republican challengers She has garnered the
endorsements of the California Democratic Party
State Controller Betty Yee State Treasurer John
Chiang Assembly Speaker Anthony Rendon and
the SEIU California to name a few Her total
campaign contribution nearly triples that of her
nearest contender Loretta Sanchez Harris would
be the first Indian-American and only the second
African-American woman senator
So what could make the June primary interesting
California uses a ldquojungle primaryrdquo system that
pits all candidates against each other regardless
of party in a primary race The top vote getters
go on to the general election
So while Harris appears a shoe-in for the
November ballot Sanchez is in danger of missing
the cut (not securing the second highest number
of votes in June) and watching the November
elections from the sidelines
A united Republican party is Sanchezrsquos biggest
concern If one GOP candidate runs in the
primary the party could steal the second
General Election ballot spot from Sanchez The
GOP took a major step in this direction when
Republican Senate candidate Rocky Chavez an
Oceanside assemblyman dropped out of the
race in early February
If Sanchez manages to secure the other ballot
spot this could set up a very interesting election
come November While Harrisrsquo numbers are
still considerably higher Sanchez stands to
become the first-ever Hispanic US Senator from
California a prospect that might have significant
appeal to the statersquos ever-growing Hispanic
population Sanchez also is considered more of a
moderate while Harris is seen as a solid liberal
The GOP on the other hand has not won a
Senate race in California since 1988 and any
contender will suffer the additional handicap
of running when the Democratic presidential
nominee is sure to carry California by a wide
margin maybe The wild card continues to be
RONALD FONG
PresidentCEO
|
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Donald Trump and his ability to rally the Republican
vote
The top Republican candidates include former state
GOP chair Tom Del Beccaro and George ldquoDufrdquo
Sundheim The GOP field got a little more crowded in
early March with wealthy Silicon Valley businessman
Ron Unz throwing his hat in the ring Unz ran for
Californian governor in 1994 and is probably best
know for authoring Proposition 227 which effectively
eliminated bilingual education in California
Even with a Trump ldquobumprdquo the chances of a Republican
securing Boxerrsquos seat seems like a long shot at best
The real question appears to be whether a more
conservative Democrat or a long-shot Republican
has any real chance of defeating Kamala Harris
Stay tuned n
Nielsen database-latest 52 weeks ending 41115
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YOU GET MORE PROFIT OUT WHEN YOU PUT OBERTO BEEF JERKY IN
YOU GET OUT WHAT YOU PUT INTM
Retail moves quickly Does your accountant
Whether itrsquos protecting customer data implementing new point-of-sale technology or navigating the tax impact of a business strategy work with a team who speaks your languagemdashand moves at your speed
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Certified Public Accountants | Business Consultants
F R O M T H E C H A I R
Growing People Growing GroceryCultivating the next generation of grocery leaders is a noble challenge worthy of our time energy and resources
The grocery business is an integral part of my
life I started working as a courtesy clerk at Bel
Air Market when I was 16 and joined Raleyrsquos
when the company was purchased in 1993
Sometimes the workplace was like a family
reunion for me ndash as many as 11 of my relatives
worked at Raleyrsquos or Bel Air at one point or
another Yoursquod probably describe my family as
having ldquogroceryrdquo in our blood
Irsquove stayed in the business because of the endless
doors of opportunity Prepared or perhaps
not I chose to walk through them and couldnrsquot
imagine working in any other industry Being in
the grocery business soon became my destiny
and I love what we do and who we serve
Of course working and growing the industry
isnrsquot limited to stocking products or managing
a department or supporting stores from the
corporate office We need produce buyers
growers farmers and manufacturers to provide
the food distributors and shippers to move it
from place to place and chefs to provide culinary
inspiration to create new in-store environments
for enjoying food
There are countless opportunities for young
people to join our industry and have a long
rewarding career but itrsquos up to us to find and
inspire them
How do we do that By connecting with young
people and providing resources to support them
in their pursuits
Letrsquos start by promoting STEM education ndash
Science Technology Engineering and Math ndash
for every student We need to fund scholarships
that make it easier for young people to advance
their learning
Our CGA Educational Foundation has supported
thousands of students in their educational
endeavors But most importantly by mentoring
the emerging stars in our communities and
sharing with them our success stories in the
grocery industry
CGA recently celebrated the careers of three
industry veterans Rob McDougall Donna
Tyndall and Bruce Wyatt at our annual Hall
of Achievement dinner They are outstanding
examples of leaders who have personally
invested their time talents and resources into
growing people who grow our companies and
our industry
Many companies in our great industry are
finding innovative ways to educate the industry
At Raleyrsquos wersquore reaching the next generation
through a program called ldquoWhere Your Food
Grows and Grazesrdquo which we developed
in cooperation with local ranchers and the
California Rangeland Trust
Students spend time on a ranch learning how
livestock are cared for and produce is grown and
then they tour one of our stores to find out more
about nutrition and our role in making fresh food
available to them Our goals are to inspire young
people to make good food choices and to share
our industryrsquos opportunities with them
Like farmers our job is to cultivate new talent
and watch it sprout The next generation of
leaders and innovators are out there waiting
for us to inspire them We can help this next
generation blossom grow and reap a harvest n
KEVIN KONKELCGA Chair of the Board
Senior Vice President Store Operations
Raleyrsquos Family of Fine Stores
|
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Grocery Operations We Smooth lsquoem Out
Operational Eciency Greater Convenience More Money in Your Pocket
Cart Retrieval The industry leader in
shopping cart retrieval Reduce cart-loss expenses
and aggravation Detailed reporting from
an accountable partner
Because we understand the details of grocery operations we can save you money and aggravation dealing with things youd rather not have to Come to us to simplify your operations and save money
Cart Maintenance Reduce cart cleaning and
maintenance costs Lower new cart acquisition
expenses On-site quick return-to-action
convenience
Coupon Redemption Receive and reinvest manufacturer
reimbursement money faster Avoid costly chargebacks enjoy
one-stop convenience Zero upfront costs or counting
and sorting hassles
wwwcartretrievalnet1-800-252-4613
(818) 563-3031
CSCRC and CCRC are RMS companies ndash 1020 North Lake St Burbank CA 91502
FOLLOW US ON SOCIAL MEDIA
wwwcartretrievalnet
V I E W P O I N T
The Shopping Path of Least Resistance It isnrsquot quite the replicator technology fantasized about by ldquoStar Trekrdquo ndash with which one could just say ldquoEarly Grey Hotrdquo to a computer and it would magically appear ndash but that doesnrsquot mean it canrsquot ndash and wonrsquot ndash change the world
The fact is I think it has the potential to do both
Earlier this year we learned that Samsung
had unveiled a new refrigerator at the annual
Consumer Electronics Show (CES) in Las Vegas
But this wasnrsquot just a refrigerator It was a
ldquosmartrdquo refrigerator
Called the Family Hub Refrigerator this piece of
equipment comes with a 215-inch touchscreen
on one of its doors which people can use
to shop for products as they run low or out
Even more impressive the refrigerator also has
cameras inside that keep track of products as
they are removed so it can let people know
when supplies are running low And people
can access all this information from their smart
phones and use them to place orders
Wow Irsquom old enough to remember when
refrigerators didnrsquot even have automatic
defrosting (Young people reading this will have
to trust me on this We used to have to unplug
freezers and refrigerators and put pots of hot
water inside in order to defrost them It was a
total pain in the neck but a routine part of life
(Barbaric huh)
Samsung said that it has partnered with
MasterCard to provide payment services and
to start with MyWebGrocer FreshDirect and
ShopRite for online grocery ordering Needless
to say these platforms are thrilled
ldquoCommerce-enabled devices like the Family
Hub refrigerator represent an unprecedented
opportunity for our customers because it puts
them right where the consumer path to purchase
begins in the kitchenrdquo said Eric Healy president
of MyWebGrocer And Jodi Kahn FreshDirectrsquos
Chief Consumer Officer observed that it created
a ldquofrictionlessrdquo and ldquoseamlessrdquo road between
shopper and shop
Bingo
Not long after Samsung made its announcement
I got an email from Amazon promoting a new
item available on the site ndash a Brita water pitcher
that comes with a filter that enables the consumer
to have cleaner better-tasting water
Except that this was a pitcher with a curveball
ndash because this Brita pitcher is WiFi enabled
KEVIN COUPEFounder
MorningNewsBeatcom
Commerce-enabled devices like the Family Hub Refrigerator represent an unprecedented opportunity for our customers because it puts them right where the consumer path to purchasebegins in the kitchen
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LIF
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8
V I E W P O I N T
It comes the email said ldquoequipped with a built-in
counter that tracks the amount of water that passes
through the pitcherrsquos filter The pitcher itself will
automatically order a new filter through Amazon Dash
Replenishment when the old filter nears its capacity
This new connected pitcher with Amazon Dash
Replenishment gives Brita owners exactly what they
want ndash a new Brita filter on their doorstep at the time
they need itrdquo
Pretty cool
(Irsquom tempted here to tell younger readers that I can
remember a time when we had to fetch water from
the well with a bucket and a rope but Irsquom not quite
that old)
The Brita Infinity Pitcher will cost about 45 bucks
which seems to be about a third more expensive than
most of the Brita pitchers that I found on Amazon
but the argument is that the tech-driven convenience
will make the price difference palatable And I have to
say that I think the argument is pretty compelling Or
to coin a phrase it is an argument that holds water
Innovations along these lines have been much
discussed over the years and it only was a matter of
time before dreams and reality met in such a way
that products like these could become mainstream
Without a doubt wersquore pretty much there products
like the Family Hub Refrigerator or Amazonrsquos
ecosystem-centric strategies (which are tied to the
Echo Subscribe-and-Save the Dash replenishment
system and even the delivery drones that probably
will be flying over our homes one of these days) are
putting us right in the middle of what could turn out
to be a pretty remarkable time And retailers have to
be prepared to embrace this revolution which almost
certainly will unfold faster than anyone expects
Interestingly Ford and Amazon announced at CES that
they are working on an initiative ldquogranting Ford owners
unprecedented access to their connected-home devices
from their cars and vice versardquo
And the Amazon ecosystem expands a little more
What is important to remember here is that once one
buys a refrigerator or a water pitcher it usually will be
quite some time before you have to replace them The
refrigerator only has value if it is filled with food that
you want to eat and the pitcher only has value if you
have the filters that create cleaner tastier water And
so it is critical for companies like Samsung and Brita
to find ways to be more relevant and useful which is
exactly what theyrsquove done
One of the things that traditional retailers have to
realize is that the advent of smart appliances and the
expanding ecosystems being created by some retailer
platforms ndash especially but not limited to Amazon ndash
are combining to create an environment in which it
is less and less necessary for people to actually go to
the store These progressive-minded companies are
creating paths of least resistance that provide few
reasons for consumers to detour elsewhere
Not everybody and not all the time But enough to
have an impact on a lot of bottom lines
One of the things that one finds a lot at food industry
conferences is people who like to cast doubt on the
e-revolution They like to talk about the people who
still want to go to the store about the hiccups that
can affect click-and-collect or delivery services about
how rural customers have different needs than urban
customers and about how selling points like ldquoyour
neighborhood grocerrdquo or ldquohometown proudrdquo or
ldquoold-fashioned servicerdquo or similar tropes are enough
for retailers to hang their hats on when competing in
this new environment
All of this may in fact be true And still not enough
to stave off the impact of technology especially on a
generation of shoppers that does not remember those
ancient pre-Amazon days
Not all people and not all the time But enough to
create leaks in the traditional market shares of a lot
of retailers and manufacturers Leaks that are likely to
grow bigger with time
The future is coming And it is traveling at Warp Eight n
One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution
CA
LIF
OR
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IFO
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Grocers Converge on Sacramento
Grocery retailers and their supplier partners from
throughout California gathered in Sacramento in
late March to share business concerns with their
state representatives on key issues facing the
grocery industry
The face-to-face meetings with the majority of state
legislators highlighted the 2016 CGA Grocers Day
at the Capitol the Associationrsquos one-day member
advocacy event at the Statersquos Capitol
ldquoThis was a critical year for our members to
participate in CGArsquos premier member lobbying
activityrdquo said CGA President Ron Fong ldquoOur
members really stepped up and did a tremendous job
of sharing our story and providing valuable insight
into how our businesses operaterdquo
In addition to the face-to-face meetings attendees
heard from Gov Jerry Brown who addressed a
number of topics including the deal struck with labor
leaders over Easter weekend to introduce legislation
that will raise the statersquos minimum wage to $15
The governor said a deal needed to be struck as
an alternative to a minimum wage proposition
on the November ballot that would be even more
burdensome on Californiarsquos business community
The Governorrsquos remarks were met with skepticism
by the Association who later released a statement
chiding the governor for not including the business
community in its meeting with labor
ldquoOur members are dismayed at the events of the
past three daysrdquo Fong said in a written statement to
the media ldquoMajority Democrats and the Governor
(l to r) Jonathan Mayes Albertsons Kendra Doyel Ralphs Gov Jerry Brown Diana Godfrey Smart amp Final Ron Fong CGA
(l to r) Charla Giles Save Mart Supermarket Assemblymember Rudy Salas Michel LeClerc North State Grocery Inc Dave Madden MillerCoors
(l to r) Sen Richard Roth Mary Connelly Costco Eric Lindberg Jr Grocery Outlet Inc
CG
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IFO
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11
rammed a $5 increase in Californiarsquos minimum
wage through the entire legislative process in
just three days They did so without meaningful
conversation or an opportunity for businesses that
will bear the cost burden to weigh in on the issuerdquo
Attendees were also briefed by CGA staff on the key
issues they would discuss during their legislative
visits These topics included employee scheduling
wine coupons food bank donation tax credits and
the statersquos beleaguered beverage container recycling
program
Following an afternoon of legislative meetings
CGA hosted its annual Presidentrsquos Reception that
allowed Grocers Day attendees to meet again with
state legislators and staff but in a more relaxed
environment
CGA also hosted its popular Ice Cream Social
located this year inside the State Capitol and was
sponsored by Clover Stornetta Farms which provided
the ice cream n
The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day
Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc
Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc
Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final
Breakfast Kellogg Company Save Mart Supermarkets
Luncheon Jelly Belly Candy Co
Ice Cream Social Clover Stornetta Farms Inc
Presidentrsquos Reception Command Packaging MillerCoors
Legislative visits highlighted CGArsquos Grocers Day at the Capitol
Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social
Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA
CG
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IFO
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Foundation Selects New Trustee ChairBrad Askeland Vice President
Holiday Markets has
been elected Chair of the
California Grocers Association
Educational Foundation
Board of Trustees Askeland
had previously served as
Foundation Vice Chair
Askeland succeeds former CGAEF Chair Jim Van
Gorkom NuCal Foods who served in that position
since 2011 Mark Johnson Unified Grocers Inc was
elected to replace Askeland as the Boardrsquos Vice Chair
Jacquie Slobom Gelsonrsquos Markets and Jerry Landers
Raleyrsquos will continue as the Foundationrsquos Secretary
and Treasurer respectively
ldquoWe look forward to Brad building on the programs
Jim was instrumental in fosteringrdquo said CGAEF
President Ron Fong
Askelandrsquos responsibilities will be to guide and direct
the CGAEF Board of Trustees The Foundation
was created in 1992 to advance Californiarsquos grocery
industry through employee education industry
research and recognition of excellence
Askeland who has served as a Trustee since 2009
began his grocery career in 1988 as a courtesy clerk
for a small independent market before joining
North State Grocery Inc in 1995 He managed
several stores before being named director of human
resources in 2003 n
SEC Store Tour Features Draegerrsquos MarketThe California
Grocers Associationrsquo
Supplier Executive
Council kicked off
its 2016 Store Tour
series in March at
Draegerrsquos Market in
San Mateo The tour
was led by Richard
Draeger chief
operations officer
for the company
The Draeger executive led the SEC members on an
aisle-by-aisle tour sharing his companyrsquos business
philosophy and strategy Draeger told attendees that
for his company itrsquos not about having the lowest
prices but ldquomaking things easier for the consumerrdquo
He added that shopping local is what makes
Draegerrsquos different
Following the tour SEC members were treated to
a luncheon hosted by Draegerrsquos popular in-store
cooking school To learn more about becoming
an SEC member contact Sunny Porter CGA
at (916) 448-3545 n
New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER
Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes
Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom
Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo
2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916
The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals
CMYKFOCUS ON ALLERGENSTopical educational sessions and resources
June 5 - 7 | Houston
FOR MORE INFORMATION IDDBAORG 6083105000
REGISTER TODAYEXPANDED EXPO HOURS
NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths
SHOW amp SELL CENTERCAKE DECORATING CHALLENGE
MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH
JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain
CG
A N
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IFO
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CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in
March the second ldquotoolrdquo in its Grocery Compliance
Toolkit ndash this one focused on the Americans with
Disabilities Act
CGA contracted with the Sacramento-based law firm
of Downey Brand LLP to create a comprehensive
user-friendly ADA compliance guideline In addition
CGA hosted two regional seminars in conjunction
with the release of the ADA compliance ldquotoolrdquo In
addition the CGA Educational Foundation hosted a
one-hour webinar conducted by Downey Brand that
outlined the specifics of complying with the ADA
ldquoCalifornia grocers are increasingly seen as great
targets for opportunistic drive-by ADA public
access lawsuitsrdquo said CGA President Ron Fong
ldquoDespite recent changes to law serial plaintiffs
continue to send demand letters and file frivolous
lawsuits against grocers in an attempt to extract
monetary settlements We created this toolkit to
help retailers fend off these lawsuitsrdquo
The Grocery Compliance Toolkit was created as
a CGA member benefit to help grocery retailers
understand and manage the risks associated with
complying with state regulations related to the
grocery industry
The first ldquotoolrdquo was released last year and focused
on hazardous waste disposal
CGA members can download both the ADA and
hazardous waste disposal ldquotoolsrdquo from CGArsquos website
wwwcagrocerscom along with viewing both
seminars
CGA will release additional compliance ldquotoolsrdquo in the
coming months n
2014 2015
Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM
Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years
VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA
SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION
For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute
llaacutemenos o visite nuestra pagina de internet
Variety is the spice of lifeEnjoy it with our award winning
premium authentic line of cheeses
While that may hold true in the Lone Star State our
friends from Texas may be shocked to find that the
middle of the road in California is a relatively safe
place to be But finding safety on those center lines
wasnrsquot always so easy
Open primaries and the rise of the moderates
particularly on the Democratic side of the aisle have
widened that middle of the road from a dangerously
thin series of narrow yellow stripes to a ten-foot
wide median safe from most passing traffic
In a nation that divides its states into a red column
(for Republicans) and a blue column (for Democrats)
California exists solidly in the blue column with
Democrats holding every statewide office as well as
near supermajorities in both legislative houses
However a closer look reveals unexpected patches of
purple dotting the political map
Within these purple areas are a number of legislative
districts that reflect a uniquely Californian political
identity ndash a laissez faire attitude on social issues
mixed with a more conservative middle-of-the-road
view towards taxes and regulation
It was the voters in these areas the backers of
Proposition 14 had in mind back in 2010 when they
successfully pressed for passage of this initiative
to bring open primaries to California effectively
changing the game of legislative elections in our state
The rationale for passage was simple
In an overall political climate that often forced
candidates to the far-left and far-right during
primary elections in order to cater to the base to
win their partyrsquos nomination the general election
would often leave middle-of-the-road voters from
both parties (as well as independents) with no viable
candidates to support
GO
VE
RN
ME
NT
RE
LA
TIO
NS
Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD
BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo
In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses
Continued on p 18
Aaron Moreno Senior Director
Government Relations CGA
iStock
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LIF
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17
If all candidates stood for primary election at the
same time with all voters choosing the top-two vote
getters for the general election regardless of party
open primary backers reasoned that candidates
would have to broaden their appeal to all voters in
a legislative district not to just the ldquotrue believersrdquo
who often decided primary elections The result
would be more moderate legislators be they
Democrat or Republican
This has been the case as
illustrated by the elections
of Republicans Catherine
Baker and David Hadley
in Assembly districts that
had elected Democrats in
previous election cycles Both
won due to their willingness
and ability to speak to voters from
both parties from the primary all the way
to the general election This would not have been
possible without open primaries
The open primary has not only changed the strategy
of candidates looking to enter the Legislature it
has also changed the way interest groups develop
strategies to elect legislators that best represent their
world views
Californiarsquos business interests have been particularly
savvy in adapting to these changes by adopting
strategies for supporting legislative candidates
that were once unheard of There was once a time
when it was automatic that these business interests
only backed Republican candidates This has
changed particularly in districts with a majority of
Democratic voters
In these districts it is not uncommon to see a
general election featuring two Democrats These
types of races provide a perfect synergy between
Democrats running from a more moderate position
and business interests who see a benefit from having
such political perspectives in the Legislature
This new breed of moderate Democrat would
have found it hard to advance out of a traditional
Democratic primary where the winner was decided
by the hard-core base
In the open primary system a moderate Democrat
can not only survive but thrive making it to the
general election by taking positions that appeal not
just to their fellow Democrats but to decline-to-state
and even moderate Republican voters
While remaining socially liberal like more
traditional Democrats moderates stand apart
by taking firm stances against new taxes and
unnecessary government regulation ndash two views
that align them with business interests
around the state
And the business community
has taken note spending
millions of dollars over the
past few years either in direct
donations to candidates
or the establishment of
political action committees
spending on behalf of
a candidate to elect more
moderate Democrats This has had
a big impact on the Legislature particularly in the
Assembly where the informal but highly influential
Moderate Caucus holds sway
Numbering anywhere from 10 to 15 depending on
who you ask and what is up for a vote on a particular
day this bloc of Democrats led by Assemblymembers
Rudy Salas from Bakersfield and Jim Cooper from
Sacramento have had considerable success helping
the business community in recent years by using
their influence to either water down legislation that
would adversely affect business preventing such
bills from being voted on by the full Assembly
or voting with Republicans to kill anti-business
legislation
Some notable business victories facilitated by the
Moderate Democrats during last yearrsquos legislative
DEM
REP
The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views
Continued from p 17
G O V E R N M E N T R E L AT I O N SCONTINUED
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18
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G O V E R N M E N T R E L AT I O N S
session were the defeat of legislation that would
have required a 50 percent reduction in petroleum
use in motor vehicles the preventing of legislation
increasing the minimum wage from being heard on
the Assembly Floor and the preventing of legislation
requiring predictive scheduling from also being
heard on the Assembly Floor among others
Business groups such as CGA and others have
benefitted from supporting the candidacies of
these Moderate Democrats While their support
is certainly not 100 percent even their support 50
to 60 percent of the time is enough to stave off the
seemingly never-ending onslaught of legislation that
has the potential to put a damper on the business
climate in California
Those percentages may not seem like much but
when you consider that without open primaries the
Democrats coming from these same Democratic
majority districts would often stand with business
20 percent of the time or less the value of Moderate
Democrats to business is high
So while the middle of the road in Texas may be
nothing more than road kill armadillos and yellow
stripes the medians in California are wide berths
that provide a cushion for business from forces that
donrsquot necessarily have their best interests in mind
We must all do our part to keep that cushion in
place The election of Moderate Democrats whenever
possible is a great way to do so n
Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto
Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats
July 27-28 2016
Register today at
wwwfresnofoodexpocom
For more information contact
Amy Fuentes at 559-227-9999
or infofresnofoodexpocom
Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much
more than just a trade show The Fresno Food Expo is a celebration of Central
Californiarsquos vibrant food community and a showcase of our regionrsquos most
innovative food and beverage producers
Whether you are sourcing for fresh product deli baked goods or beer and wine
the Fresno Food Expo is your opportunity to connect with local trendsetters and
CEOrsquos behind some of the nationrsquos largest food companies right in their backyard
Come sit at our table and join us for an experience
you wonrsquot find anywhere else
Discover the abundance of Central Californiarsquos Food Region
FREE Buyer Registration
raquo Grower amp Manufacturer Site Tours
raquo VIP Event amp Opening Reception
raquo Buyerrsquos Breakfast
raquo Business to Business Trade Show
Your registration includes access to the following events
FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo
C A P I T O L I N S I D E R
Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program
Californiarsquos Beverage Container Recycling
Program was created by legislation 30 years ago
At that time recycling was a new word and the
intent of the program was to change
consumer habit Glass and aluminum
containers were sold with a surcharge
which the consumer would receive
back if they returned the containers
In that day and age people
commonly purchased six-packs
of glass soda bottles from
their grocery store They were
encouraged to bring those
glass containers back to the
store and exchange them
for the next six-pack they
purchased The convenience
of bringing containers back to
the store was the impetus for
the convenience zones created
by the law
At that time curbside recycling
didnrsquot exist nor were there
any real markets for recycled
material
Over the years a lot has
changed in California
Our communities are different
The definition of convenience
has changed Industries reliant
on manufacturing with recycled
materials have been born and are
thriving Most important we have
changed the Californiarsquos throw away culture to
one focused on recycling and reuse
Yet Californiarsquos Bottle Bill has failed to keep up
with the times
Today the perfect storm is brewing
A number of California communities are revolting
against convenience zone recyclers placing fees
and others obstacles before them in an
effort to keep them away
These recyclers while generating the
majority of containers returned through
the program attract patrons that many
community leaders and grocery store
customers prefer not to see in the
parking lot of their local grocery
store
Petroleum prices have driven the
scrap price for plastic to a historic
low making recycled content more
expensive than virgin product
In addition the formula Cal Recycle
uses to determine the overall cost
of recycling has failed to accurately
capture recent increases in minimum
wage and other cost factors These
three elements combined have made
it nearly impossible for convenience
zone recyclers to remain in business
This is evident by the announcement
from RePlanet the Statersquos largest
convenience zone recycler in late
January to decertify 200 locations in
Northern California
The decertification of convenience
zones starts a process for Cal Recycle
First they are required to review the zones
where each site was located They can either
choose to exempt the zone from further service
or change the status of the zone from served to
unserved
LOUIE BROWN
Partner in the
Sacramento office
of Kahn Soares and
Conway LLP
iStock
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C A P I T O L I N S I D E R
The decision to change a zone to unserved triggers an
announcement by Cal Recycle to all dealers in the zone
that they have 30 days to decide to take containers back
in the store or pay the $100 per day ldquoin lieurdquo fee
Cal Recycle is evaluating the zones impacted by the
decertification of RePlanet Since the number of
exempted zones is capped by statute it is expected Cal
Recycle will be forced to change the status on a large
number of zones to unserved and likely impact hundreds
of dealers in northern California This process is expected
to take the next 90 to 120 days to complete
In the meantime CGA and others are developing a
legislative strategy to address these issues before grocers
are required to take action Your legislative team is
focused on a comprehensive solution that takes the
grocer out of the position of the recycler of last resort
along with a number of other changes to bring the
program into 2016 n
iStock
CA
LIF
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21
Dog chow n at u r a l plus vitamins amp minerals
is made with real chicken There ARE no artificial colors
and Yoshiloves itloves itloves it
I makeNO ARTIFICIALCOLORS OR PRESERVATIVES
MADEWITH Real Chicken
ldquo
rdquoBARBARA JDog Chow ProductionDavenport IA
I makeCOLORS OR PRESERVATIVES
New
Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA
reg
P E R S P E C T I V E
Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business
There are several proposed ballot measures that
may be on the November statewide ballot that
would make significant changes to Californiarsquos
minimum wage and tax laws This article takes
a brief look at the four competing tax increase
measures as well as two competing minimum
wage measures
COMPETING TAX INCREASE INITIATIVES FOR
2016 BALLOT
There are four competing tax increase measures
on this yearrsquos ballot They include
n A proposal by the California Hospital
Association and SEIU-UHW that would expand
and make permanent income tax increases
on Californiarsquos highest earners but also allow
Prop 30rsquos sales tax increase to expire in 2016
as scheduled
n A plan by SEIU-UHW and the California
Teachers Association that would extend the
income tax increases under Prop 30 until
2030 and would let the sales tax increase
expire in 2016 as scheduled
n A third measure would impose a significant
surcharge on property valued over $3 million
n A fourth measure would increase the tax on
tobacco products by $2 per pack
ldquoThe School Funding and Budget Stability Act
of 2016rdquo No 15-0065
This measure would extend until 112031 the
personal income tax rates established by Prop
30 and dedicate the funds entirely to schools
without the ability of the Legislature to suspend
or withhold funds even in a state budget crisis
The measure also exempts these funds from
the Statersquos Rainy Day Fund established by voters
in 2014 by Prop 2 (requiring a portion of state
revenues be allocated to the state budget reserve
and to paying down debt)
In Section 3 of the measure the following
statements of purpose and intent are set forth
ldquo(a) The chief purpose of this measure is to
protect our schools by temporarily extending
current income tax rates on wealthy
Californians instead of awarding a huge tax
break to couples earning more than half a
million dollars a year or individuals earning
more than a quarter million Instead of
sending money back into the pockets of the
wealthy this measure sends the money to a
special account that must be spent exclusively
on schools
ldquo(b) This measure is intended to keep California
on a track toward balanced budgets and
reliable funding for schools and community
colleges preventing a new round of
devastating cuts to public education and a
return to the days of chronic budget deficits
and funding cuts
ldquo(c) This measure guarantees in the Constitution
that the revenues it raises for schools will
be sent directly to school districts and
community colleges for classroom expenses
not administrative costs This school funding
cannot be suspended or withheld no matter
what happens with the state budgetrdquo
ldquoThe Invest in Californiarsquos Children Actrdquo
No 15-0070
This measure would make permanent the Prop
30 personal income tax rates after 2019 plus add
additional higher rates for those earning above
$1 million per year (individuals) or $2 million
(married filing jointly) with the highest bracket
of 143 percent and earmark the funds for
CHRIS MICHEL I
Legislative Advocate
Aprea amp Micheli Inc
Continued on p 24
CA
LIF
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23
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
|
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LIF
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24
P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
|
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27
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
CA
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
CA
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WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
iStock
|
CA
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30
copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
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INA
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33
Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
LIF
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NIA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
NIA
GR
OC
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
LIF
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
OR
NIA
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
OR
NIA
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
FEATURESMergers and Acquisitions 2015 was a record year for all merger and acquisition activity and 2016 might hit the same heady heights The reasons are simple and not surprising
Saving the Planet Quietly For years now therersquos been a quiet movement under way on the part of the food industry to save the planet And best of all these sustainability efforts arehellipwell sustainable
Exploring Tomorrow TodayA California-based think tank is exploring global economics generational trends and technological developments to learn more about where and how people will live eat and shop in the future
Foundation Inducts Industry ExecsMore than 600 industry peers family and friends gathered in Costa Mesa Calif Recently to honor three grocery executives inducted into the CGA Educational Foundation Hall of Achievement
COLUMNSPresidentrsquos Message Could Trump Bump Impact Senate Race 4
From The Chair Growing People Growing Grocery 6
Viewpoint ndash Kevin Coupe The Shopping Pate of Least Resistance 8
Capitol Insider Trouble Is Brewing With Californiarsquos Bottle Bill 20
Perspective Competing Ballot Measures to Increase Taxes and Wages 23
Inside the Beltway POS Credit Card Fraud Escalates 28
Washington Report Challenges Continue for EMV Implementation 30
DEPARTMENTSCGA News 10
15 Minutes With 64
Advertiser Index 68
C O N T E N T S | Issue 2
CALIFORNIA GROCERS ASSOCIATION
PresidentCEO Ronald Fong
Senior Vice President Government Relations and Public Policy Keri Askew Bailey
Senior Vice President Business Development amp Marketing Doug Scholz
Vice President Communications Dave Heylen
Controller Gary Brewer
Executive Director CGA Educational FoundationShiloh London
Senior Director Government Relations Aaron Moreno Senior Director Events amp Sponsorship Beth Wright
Director CGA Educational Foundation Brianne Page
California Grocer is the official publication of the California Grocers Association
1215 K Street Suite 700 Sacramento CA 95814 (916) 448-3545 (916) 448-2793 Fax wwwcagrocerscomFor association members subscription is included in membership dues Subscription rate for non-members is $100 and does not include CGA Buyersrsquo Guidecopy 2016 California Grocers Association
Publisher Ronald Fong E-mail rfongcagrocerscom
Editor Dave Heylen E-mail dheylencagrocerscom
Associate Editor Tony Ortega E-mail tortegacagrocerscom
For advertising information contact Tony Ortega E-mail tortegacagrocerscom
38
50
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P R E S I D E N T rsquo S M E S S A G E
Could Trump Bump Impact Senate RaceThe 2016 November General Election may be one of the most important and influential in some time In each issue of California Grocer leading up to the General Election I will examine the key national state and local races and their impact on our industry This issue Californiarsquos open Senate seat
Itrsquos been 24 years since the last open seat
Senate election in California Can you remember
who represented California prior to incumbent
Senators Diane Feinstein and Barbara Boxer My
guess is most canrsquot Last year Boxer said she was
throwing in the towel opening the door for a
new senator to be elected in November
Before examining the candidates letrsquos take a
quick look back at how we got here Boxer was
first elected to the Senate in 1992 the same
year Californiarsquos other Senator Diane Feinstein
took office after winning a special election to fill
the term left vacant by the resignation of Pete
Wilson Feinstein was re-elected in 1994 and has
served ever since
On the surface the race for Boxerrsquos seat appears
very low-key Itrsquos a safe bet that a Democrat
will retain this seat (Democrats enjoy an
overwhelming advantage right now in California)
And right now there is one clear leader in the
race Who challenges the frontrunner depends
on what happens in the June 7 primary Before I
explain letrsquos first look at the leading candidates
On the Democratic side California Attorney
General Kamala Harris and Congresswoman
Loretta Sanchez (46-CA) are the two top
frontrunners
As we go to press Harris enjoys a comfortable
lead over both her nearest party rival and
Republican challengers She has garnered the
endorsements of the California Democratic Party
State Controller Betty Yee State Treasurer John
Chiang Assembly Speaker Anthony Rendon and
the SEIU California to name a few Her total
campaign contribution nearly triples that of her
nearest contender Loretta Sanchez Harris would
be the first Indian-American and only the second
African-American woman senator
So what could make the June primary interesting
California uses a ldquojungle primaryrdquo system that
pits all candidates against each other regardless
of party in a primary race The top vote getters
go on to the general election
So while Harris appears a shoe-in for the
November ballot Sanchez is in danger of missing
the cut (not securing the second highest number
of votes in June) and watching the November
elections from the sidelines
A united Republican party is Sanchezrsquos biggest
concern If one GOP candidate runs in the
primary the party could steal the second
General Election ballot spot from Sanchez The
GOP took a major step in this direction when
Republican Senate candidate Rocky Chavez an
Oceanside assemblyman dropped out of the
race in early February
If Sanchez manages to secure the other ballot
spot this could set up a very interesting election
come November While Harrisrsquo numbers are
still considerably higher Sanchez stands to
become the first-ever Hispanic US Senator from
California a prospect that might have significant
appeal to the statersquos ever-growing Hispanic
population Sanchez also is considered more of a
moderate while Harris is seen as a solid liberal
The GOP on the other hand has not won a
Senate race in California since 1988 and any
contender will suffer the additional handicap
of running when the Democratic presidential
nominee is sure to carry California by a wide
margin maybe The wild card continues to be
RONALD FONG
PresidentCEO
|
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Donald Trump and his ability to rally the Republican
vote
The top Republican candidates include former state
GOP chair Tom Del Beccaro and George ldquoDufrdquo
Sundheim The GOP field got a little more crowded in
early March with wealthy Silicon Valley businessman
Ron Unz throwing his hat in the ring Unz ran for
Californian governor in 1994 and is probably best
know for authoring Proposition 227 which effectively
eliminated bilingual education in California
Even with a Trump ldquobumprdquo the chances of a Republican
securing Boxerrsquos seat seems like a long shot at best
The real question appears to be whether a more
conservative Democrat or a long-shot Republican
has any real chance of defeating Kamala Harris
Stay tuned n
Nielsen database-latest 52 weeks ending 41115
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YOU GET MORE PROFIT OUT WHEN YOU PUT OBERTO BEEF JERKY IN
YOU GET OUT WHAT YOU PUT INTM
Retail moves quickly Does your accountant
Whether itrsquos protecting customer data implementing new point-of-sale technology or navigating the tax impact of a business strategy work with a team who speaks your languagemdashand moves at your speed
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Certified Public Accountants | Business Consultants
F R O M T H E C H A I R
Growing People Growing GroceryCultivating the next generation of grocery leaders is a noble challenge worthy of our time energy and resources
The grocery business is an integral part of my
life I started working as a courtesy clerk at Bel
Air Market when I was 16 and joined Raleyrsquos
when the company was purchased in 1993
Sometimes the workplace was like a family
reunion for me ndash as many as 11 of my relatives
worked at Raleyrsquos or Bel Air at one point or
another Yoursquod probably describe my family as
having ldquogroceryrdquo in our blood
Irsquove stayed in the business because of the endless
doors of opportunity Prepared or perhaps
not I chose to walk through them and couldnrsquot
imagine working in any other industry Being in
the grocery business soon became my destiny
and I love what we do and who we serve
Of course working and growing the industry
isnrsquot limited to stocking products or managing
a department or supporting stores from the
corporate office We need produce buyers
growers farmers and manufacturers to provide
the food distributors and shippers to move it
from place to place and chefs to provide culinary
inspiration to create new in-store environments
for enjoying food
There are countless opportunities for young
people to join our industry and have a long
rewarding career but itrsquos up to us to find and
inspire them
How do we do that By connecting with young
people and providing resources to support them
in their pursuits
Letrsquos start by promoting STEM education ndash
Science Technology Engineering and Math ndash
for every student We need to fund scholarships
that make it easier for young people to advance
their learning
Our CGA Educational Foundation has supported
thousands of students in their educational
endeavors But most importantly by mentoring
the emerging stars in our communities and
sharing with them our success stories in the
grocery industry
CGA recently celebrated the careers of three
industry veterans Rob McDougall Donna
Tyndall and Bruce Wyatt at our annual Hall
of Achievement dinner They are outstanding
examples of leaders who have personally
invested their time talents and resources into
growing people who grow our companies and
our industry
Many companies in our great industry are
finding innovative ways to educate the industry
At Raleyrsquos wersquore reaching the next generation
through a program called ldquoWhere Your Food
Grows and Grazesrdquo which we developed
in cooperation with local ranchers and the
California Rangeland Trust
Students spend time on a ranch learning how
livestock are cared for and produce is grown and
then they tour one of our stores to find out more
about nutrition and our role in making fresh food
available to them Our goals are to inspire young
people to make good food choices and to share
our industryrsquos opportunities with them
Like farmers our job is to cultivate new talent
and watch it sprout The next generation of
leaders and innovators are out there waiting
for us to inspire them We can help this next
generation blossom grow and reap a harvest n
KEVIN KONKELCGA Chair of the Board
Senior Vice President Store Operations
Raleyrsquos Family of Fine Stores
|
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LIF
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Grocery Operations We Smooth lsquoem Out
Operational Eciency Greater Convenience More Money in Your Pocket
Cart Retrieval The industry leader in
shopping cart retrieval Reduce cart-loss expenses
and aggravation Detailed reporting from
an accountable partner
Because we understand the details of grocery operations we can save you money and aggravation dealing with things youd rather not have to Come to us to simplify your operations and save money
Cart Maintenance Reduce cart cleaning and
maintenance costs Lower new cart acquisition
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Coupon Redemption Receive and reinvest manufacturer
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one-stop convenience Zero upfront costs or counting
and sorting hassles
wwwcartretrievalnet1-800-252-4613
(818) 563-3031
CSCRC and CCRC are RMS companies ndash 1020 North Lake St Burbank CA 91502
FOLLOW US ON SOCIAL MEDIA
wwwcartretrievalnet
V I E W P O I N T
The Shopping Path of Least Resistance It isnrsquot quite the replicator technology fantasized about by ldquoStar Trekrdquo ndash with which one could just say ldquoEarly Grey Hotrdquo to a computer and it would magically appear ndash but that doesnrsquot mean it canrsquot ndash and wonrsquot ndash change the world
The fact is I think it has the potential to do both
Earlier this year we learned that Samsung
had unveiled a new refrigerator at the annual
Consumer Electronics Show (CES) in Las Vegas
But this wasnrsquot just a refrigerator It was a
ldquosmartrdquo refrigerator
Called the Family Hub Refrigerator this piece of
equipment comes with a 215-inch touchscreen
on one of its doors which people can use
to shop for products as they run low or out
Even more impressive the refrigerator also has
cameras inside that keep track of products as
they are removed so it can let people know
when supplies are running low And people
can access all this information from their smart
phones and use them to place orders
Wow Irsquom old enough to remember when
refrigerators didnrsquot even have automatic
defrosting (Young people reading this will have
to trust me on this We used to have to unplug
freezers and refrigerators and put pots of hot
water inside in order to defrost them It was a
total pain in the neck but a routine part of life
(Barbaric huh)
Samsung said that it has partnered with
MasterCard to provide payment services and
to start with MyWebGrocer FreshDirect and
ShopRite for online grocery ordering Needless
to say these platforms are thrilled
ldquoCommerce-enabled devices like the Family
Hub refrigerator represent an unprecedented
opportunity for our customers because it puts
them right where the consumer path to purchase
begins in the kitchenrdquo said Eric Healy president
of MyWebGrocer And Jodi Kahn FreshDirectrsquos
Chief Consumer Officer observed that it created
a ldquofrictionlessrdquo and ldquoseamlessrdquo road between
shopper and shop
Bingo
Not long after Samsung made its announcement
I got an email from Amazon promoting a new
item available on the site ndash a Brita water pitcher
that comes with a filter that enables the consumer
to have cleaner better-tasting water
Except that this was a pitcher with a curveball
ndash because this Brita pitcher is WiFi enabled
KEVIN COUPEFounder
MorningNewsBeatcom
Commerce-enabled devices like the Family Hub Refrigerator represent an unprecedented opportunity for our customers because it puts them right where the consumer path to purchasebegins in the kitchen
iStock
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LIF
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OC
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8
V I E W P O I N T
It comes the email said ldquoequipped with a built-in
counter that tracks the amount of water that passes
through the pitcherrsquos filter The pitcher itself will
automatically order a new filter through Amazon Dash
Replenishment when the old filter nears its capacity
This new connected pitcher with Amazon Dash
Replenishment gives Brita owners exactly what they
want ndash a new Brita filter on their doorstep at the time
they need itrdquo
Pretty cool
(Irsquom tempted here to tell younger readers that I can
remember a time when we had to fetch water from
the well with a bucket and a rope but Irsquom not quite
that old)
The Brita Infinity Pitcher will cost about 45 bucks
which seems to be about a third more expensive than
most of the Brita pitchers that I found on Amazon
but the argument is that the tech-driven convenience
will make the price difference palatable And I have to
say that I think the argument is pretty compelling Or
to coin a phrase it is an argument that holds water
Innovations along these lines have been much
discussed over the years and it only was a matter of
time before dreams and reality met in such a way
that products like these could become mainstream
Without a doubt wersquore pretty much there products
like the Family Hub Refrigerator or Amazonrsquos
ecosystem-centric strategies (which are tied to the
Echo Subscribe-and-Save the Dash replenishment
system and even the delivery drones that probably
will be flying over our homes one of these days) are
putting us right in the middle of what could turn out
to be a pretty remarkable time And retailers have to
be prepared to embrace this revolution which almost
certainly will unfold faster than anyone expects
Interestingly Ford and Amazon announced at CES that
they are working on an initiative ldquogranting Ford owners
unprecedented access to their connected-home devices
from their cars and vice versardquo
And the Amazon ecosystem expands a little more
What is important to remember here is that once one
buys a refrigerator or a water pitcher it usually will be
quite some time before you have to replace them The
refrigerator only has value if it is filled with food that
you want to eat and the pitcher only has value if you
have the filters that create cleaner tastier water And
so it is critical for companies like Samsung and Brita
to find ways to be more relevant and useful which is
exactly what theyrsquove done
One of the things that traditional retailers have to
realize is that the advent of smart appliances and the
expanding ecosystems being created by some retailer
platforms ndash especially but not limited to Amazon ndash
are combining to create an environment in which it
is less and less necessary for people to actually go to
the store These progressive-minded companies are
creating paths of least resistance that provide few
reasons for consumers to detour elsewhere
Not everybody and not all the time But enough to
have an impact on a lot of bottom lines
One of the things that one finds a lot at food industry
conferences is people who like to cast doubt on the
e-revolution They like to talk about the people who
still want to go to the store about the hiccups that
can affect click-and-collect or delivery services about
how rural customers have different needs than urban
customers and about how selling points like ldquoyour
neighborhood grocerrdquo or ldquohometown proudrdquo or
ldquoold-fashioned servicerdquo or similar tropes are enough
for retailers to hang their hats on when competing in
this new environment
All of this may in fact be true And still not enough
to stave off the impact of technology especially on a
generation of shoppers that does not remember those
ancient pre-Amazon days
Not all people and not all the time But enough to
create leaks in the traditional market shares of a lot
of retailers and manufacturers Leaks that are likely to
grow bigger with time
The future is coming And it is traveling at Warp Eight n
One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution
CA
LIF
OR
NIA
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A N
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IFO
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Grocers Converge on Sacramento
Grocery retailers and their supplier partners from
throughout California gathered in Sacramento in
late March to share business concerns with their
state representatives on key issues facing the
grocery industry
The face-to-face meetings with the majority of state
legislators highlighted the 2016 CGA Grocers Day
at the Capitol the Associationrsquos one-day member
advocacy event at the Statersquos Capitol
ldquoThis was a critical year for our members to
participate in CGArsquos premier member lobbying
activityrdquo said CGA President Ron Fong ldquoOur
members really stepped up and did a tremendous job
of sharing our story and providing valuable insight
into how our businesses operaterdquo
In addition to the face-to-face meetings attendees
heard from Gov Jerry Brown who addressed a
number of topics including the deal struck with labor
leaders over Easter weekend to introduce legislation
that will raise the statersquos minimum wage to $15
The governor said a deal needed to be struck as
an alternative to a minimum wage proposition
on the November ballot that would be even more
burdensome on Californiarsquos business community
The Governorrsquos remarks were met with skepticism
by the Association who later released a statement
chiding the governor for not including the business
community in its meeting with labor
ldquoOur members are dismayed at the events of the
past three daysrdquo Fong said in a written statement to
the media ldquoMajority Democrats and the Governor
(l to r) Jonathan Mayes Albertsons Kendra Doyel Ralphs Gov Jerry Brown Diana Godfrey Smart amp Final Ron Fong CGA
(l to r) Charla Giles Save Mart Supermarket Assemblymember Rudy Salas Michel LeClerc North State Grocery Inc Dave Madden MillerCoors
(l to r) Sen Richard Roth Mary Connelly Costco Eric Lindberg Jr Grocery Outlet Inc
CG
A N
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IFO
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11
rammed a $5 increase in Californiarsquos minimum
wage through the entire legislative process in
just three days They did so without meaningful
conversation or an opportunity for businesses that
will bear the cost burden to weigh in on the issuerdquo
Attendees were also briefed by CGA staff on the key
issues they would discuss during their legislative
visits These topics included employee scheduling
wine coupons food bank donation tax credits and
the statersquos beleaguered beverage container recycling
program
Following an afternoon of legislative meetings
CGA hosted its annual Presidentrsquos Reception that
allowed Grocers Day attendees to meet again with
state legislators and staff but in a more relaxed
environment
CGA also hosted its popular Ice Cream Social
located this year inside the State Capitol and was
sponsored by Clover Stornetta Farms which provided
the ice cream n
The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day
Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc
Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc
Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final
Breakfast Kellogg Company Save Mart Supermarkets
Luncheon Jelly Belly Candy Co
Ice Cream Social Clover Stornetta Farms Inc
Presidentrsquos Reception Command Packaging MillerCoors
Legislative visits highlighted CGArsquos Grocers Day at the Capitol
Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social
Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA
CG
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IFO
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Foundation Selects New Trustee ChairBrad Askeland Vice President
Holiday Markets has
been elected Chair of the
California Grocers Association
Educational Foundation
Board of Trustees Askeland
had previously served as
Foundation Vice Chair
Askeland succeeds former CGAEF Chair Jim Van
Gorkom NuCal Foods who served in that position
since 2011 Mark Johnson Unified Grocers Inc was
elected to replace Askeland as the Boardrsquos Vice Chair
Jacquie Slobom Gelsonrsquos Markets and Jerry Landers
Raleyrsquos will continue as the Foundationrsquos Secretary
and Treasurer respectively
ldquoWe look forward to Brad building on the programs
Jim was instrumental in fosteringrdquo said CGAEF
President Ron Fong
Askelandrsquos responsibilities will be to guide and direct
the CGAEF Board of Trustees The Foundation
was created in 1992 to advance Californiarsquos grocery
industry through employee education industry
research and recognition of excellence
Askeland who has served as a Trustee since 2009
began his grocery career in 1988 as a courtesy clerk
for a small independent market before joining
North State Grocery Inc in 1995 He managed
several stores before being named director of human
resources in 2003 n
SEC Store Tour Features Draegerrsquos MarketThe California
Grocers Associationrsquo
Supplier Executive
Council kicked off
its 2016 Store Tour
series in March at
Draegerrsquos Market in
San Mateo The tour
was led by Richard
Draeger chief
operations officer
for the company
The Draeger executive led the SEC members on an
aisle-by-aisle tour sharing his companyrsquos business
philosophy and strategy Draeger told attendees that
for his company itrsquos not about having the lowest
prices but ldquomaking things easier for the consumerrdquo
He added that shopping local is what makes
Draegerrsquos different
Following the tour SEC members were treated to
a luncheon hosted by Draegerrsquos popular in-store
cooking school To learn more about becoming
an SEC member contact Sunny Porter CGA
at (916) 448-3545 n
New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER
Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes
Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom
Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo
2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916
The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals
CMYKFOCUS ON ALLERGENSTopical educational sessions and resources
June 5 - 7 | Houston
FOR MORE INFORMATION IDDBAORG 6083105000
REGISTER TODAYEXPANDED EXPO HOURS
NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths
SHOW amp SELL CENTERCAKE DECORATING CHALLENGE
MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH
JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain
CG
A N
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IFO
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CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in
March the second ldquotoolrdquo in its Grocery Compliance
Toolkit ndash this one focused on the Americans with
Disabilities Act
CGA contracted with the Sacramento-based law firm
of Downey Brand LLP to create a comprehensive
user-friendly ADA compliance guideline In addition
CGA hosted two regional seminars in conjunction
with the release of the ADA compliance ldquotoolrdquo In
addition the CGA Educational Foundation hosted a
one-hour webinar conducted by Downey Brand that
outlined the specifics of complying with the ADA
ldquoCalifornia grocers are increasingly seen as great
targets for opportunistic drive-by ADA public
access lawsuitsrdquo said CGA President Ron Fong
ldquoDespite recent changes to law serial plaintiffs
continue to send demand letters and file frivolous
lawsuits against grocers in an attempt to extract
monetary settlements We created this toolkit to
help retailers fend off these lawsuitsrdquo
The Grocery Compliance Toolkit was created as
a CGA member benefit to help grocery retailers
understand and manage the risks associated with
complying with state regulations related to the
grocery industry
The first ldquotoolrdquo was released last year and focused
on hazardous waste disposal
CGA members can download both the ADA and
hazardous waste disposal ldquotoolsrdquo from CGArsquos website
wwwcagrocerscom along with viewing both
seminars
CGA will release additional compliance ldquotoolsrdquo in the
coming months n
2014 2015
Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM
Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years
VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA
SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION
For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute
llaacutemenos o visite nuestra pagina de internet
Variety is the spice of lifeEnjoy it with our award winning
premium authentic line of cheeses
While that may hold true in the Lone Star State our
friends from Texas may be shocked to find that the
middle of the road in California is a relatively safe
place to be But finding safety on those center lines
wasnrsquot always so easy
Open primaries and the rise of the moderates
particularly on the Democratic side of the aisle have
widened that middle of the road from a dangerously
thin series of narrow yellow stripes to a ten-foot
wide median safe from most passing traffic
In a nation that divides its states into a red column
(for Republicans) and a blue column (for Democrats)
California exists solidly in the blue column with
Democrats holding every statewide office as well as
near supermajorities in both legislative houses
However a closer look reveals unexpected patches of
purple dotting the political map
Within these purple areas are a number of legislative
districts that reflect a uniquely Californian political
identity ndash a laissez faire attitude on social issues
mixed with a more conservative middle-of-the-road
view towards taxes and regulation
It was the voters in these areas the backers of
Proposition 14 had in mind back in 2010 when they
successfully pressed for passage of this initiative
to bring open primaries to California effectively
changing the game of legislative elections in our state
The rationale for passage was simple
In an overall political climate that often forced
candidates to the far-left and far-right during
primary elections in order to cater to the base to
win their partyrsquos nomination the general election
would often leave middle-of-the-road voters from
both parties (as well as independents) with no viable
candidates to support
GO
VE
RN
ME
NT
RE
LA
TIO
NS
Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD
BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo
In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses
Continued on p 18
Aaron Moreno Senior Director
Government Relations CGA
iStock
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LIF
OR
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17
If all candidates stood for primary election at the
same time with all voters choosing the top-two vote
getters for the general election regardless of party
open primary backers reasoned that candidates
would have to broaden their appeal to all voters in
a legislative district not to just the ldquotrue believersrdquo
who often decided primary elections The result
would be more moderate legislators be they
Democrat or Republican
This has been the case as
illustrated by the elections
of Republicans Catherine
Baker and David Hadley
in Assembly districts that
had elected Democrats in
previous election cycles Both
won due to their willingness
and ability to speak to voters from
both parties from the primary all the way
to the general election This would not have been
possible without open primaries
The open primary has not only changed the strategy
of candidates looking to enter the Legislature it
has also changed the way interest groups develop
strategies to elect legislators that best represent their
world views
Californiarsquos business interests have been particularly
savvy in adapting to these changes by adopting
strategies for supporting legislative candidates
that were once unheard of There was once a time
when it was automatic that these business interests
only backed Republican candidates This has
changed particularly in districts with a majority of
Democratic voters
In these districts it is not uncommon to see a
general election featuring two Democrats These
types of races provide a perfect synergy between
Democrats running from a more moderate position
and business interests who see a benefit from having
such political perspectives in the Legislature
This new breed of moderate Democrat would
have found it hard to advance out of a traditional
Democratic primary where the winner was decided
by the hard-core base
In the open primary system a moderate Democrat
can not only survive but thrive making it to the
general election by taking positions that appeal not
just to their fellow Democrats but to decline-to-state
and even moderate Republican voters
While remaining socially liberal like more
traditional Democrats moderates stand apart
by taking firm stances against new taxes and
unnecessary government regulation ndash two views
that align them with business interests
around the state
And the business community
has taken note spending
millions of dollars over the
past few years either in direct
donations to candidates
or the establishment of
political action committees
spending on behalf of
a candidate to elect more
moderate Democrats This has had
a big impact on the Legislature particularly in the
Assembly where the informal but highly influential
Moderate Caucus holds sway
Numbering anywhere from 10 to 15 depending on
who you ask and what is up for a vote on a particular
day this bloc of Democrats led by Assemblymembers
Rudy Salas from Bakersfield and Jim Cooper from
Sacramento have had considerable success helping
the business community in recent years by using
their influence to either water down legislation that
would adversely affect business preventing such
bills from being voted on by the full Assembly
or voting with Republicans to kill anti-business
legislation
Some notable business victories facilitated by the
Moderate Democrats during last yearrsquos legislative
DEM
REP
The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views
Continued from p 17
G O V E R N M E N T R E L AT I O N SCONTINUED
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G O V E R N M E N T R E L AT I O N S
session were the defeat of legislation that would
have required a 50 percent reduction in petroleum
use in motor vehicles the preventing of legislation
increasing the minimum wage from being heard on
the Assembly Floor and the preventing of legislation
requiring predictive scheduling from also being
heard on the Assembly Floor among others
Business groups such as CGA and others have
benefitted from supporting the candidacies of
these Moderate Democrats While their support
is certainly not 100 percent even their support 50
to 60 percent of the time is enough to stave off the
seemingly never-ending onslaught of legislation that
has the potential to put a damper on the business
climate in California
Those percentages may not seem like much but
when you consider that without open primaries the
Democrats coming from these same Democratic
majority districts would often stand with business
20 percent of the time or less the value of Moderate
Democrats to business is high
So while the middle of the road in Texas may be
nothing more than road kill armadillos and yellow
stripes the medians in California are wide berths
that provide a cushion for business from forces that
donrsquot necessarily have their best interests in mind
We must all do our part to keep that cushion in
place The election of Moderate Democrats whenever
possible is a great way to do so n
Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto
Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats
July 27-28 2016
Register today at
wwwfresnofoodexpocom
For more information contact
Amy Fuentes at 559-227-9999
or infofresnofoodexpocom
Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much
more than just a trade show The Fresno Food Expo is a celebration of Central
Californiarsquos vibrant food community and a showcase of our regionrsquos most
innovative food and beverage producers
Whether you are sourcing for fresh product deli baked goods or beer and wine
the Fresno Food Expo is your opportunity to connect with local trendsetters and
CEOrsquos behind some of the nationrsquos largest food companies right in their backyard
Come sit at our table and join us for an experience
you wonrsquot find anywhere else
Discover the abundance of Central Californiarsquos Food Region
FREE Buyer Registration
raquo Grower amp Manufacturer Site Tours
raquo VIP Event amp Opening Reception
raquo Buyerrsquos Breakfast
raquo Business to Business Trade Show
Your registration includes access to the following events
FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo
C A P I T O L I N S I D E R
Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program
Californiarsquos Beverage Container Recycling
Program was created by legislation 30 years ago
At that time recycling was a new word and the
intent of the program was to change
consumer habit Glass and aluminum
containers were sold with a surcharge
which the consumer would receive
back if they returned the containers
In that day and age people
commonly purchased six-packs
of glass soda bottles from
their grocery store They were
encouraged to bring those
glass containers back to the
store and exchange them
for the next six-pack they
purchased The convenience
of bringing containers back to
the store was the impetus for
the convenience zones created
by the law
At that time curbside recycling
didnrsquot exist nor were there
any real markets for recycled
material
Over the years a lot has
changed in California
Our communities are different
The definition of convenience
has changed Industries reliant
on manufacturing with recycled
materials have been born and are
thriving Most important we have
changed the Californiarsquos throw away culture to
one focused on recycling and reuse
Yet Californiarsquos Bottle Bill has failed to keep up
with the times
Today the perfect storm is brewing
A number of California communities are revolting
against convenience zone recyclers placing fees
and others obstacles before them in an
effort to keep them away
These recyclers while generating the
majority of containers returned through
the program attract patrons that many
community leaders and grocery store
customers prefer not to see in the
parking lot of their local grocery
store
Petroleum prices have driven the
scrap price for plastic to a historic
low making recycled content more
expensive than virgin product
In addition the formula Cal Recycle
uses to determine the overall cost
of recycling has failed to accurately
capture recent increases in minimum
wage and other cost factors These
three elements combined have made
it nearly impossible for convenience
zone recyclers to remain in business
This is evident by the announcement
from RePlanet the Statersquos largest
convenience zone recycler in late
January to decertify 200 locations in
Northern California
The decertification of convenience
zones starts a process for Cal Recycle
First they are required to review the zones
where each site was located They can either
choose to exempt the zone from further service
or change the status of the zone from served to
unserved
LOUIE BROWN
Partner in the
Sacramento office
of Kahn Soares and
Conway LLP
iStock
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C A P I T O L I N S I D E R
The decision to change a zone to unserved triggers an
announcement by Cal Recycle to all dealers in the zone
that they have 30 days to decide to take containers back
in the store or pay the $100 per day ldquoin lieurdquo fee
Cal Recycle is evaluating the zones impacted by the
decertification of RePlanet Since the number of
exempted zones is capped by statute it is expected Cal
Recycle will be forced to change the status on a large
number of zones to unserved and likely impact hundreds
of dealers in northern California This process is expected
to take the next 90 to 120 days to complete
In the meantime CGA and others are developing a
legislative strategy to address these issues before grocers
are required to take action Your legislative team is
focused on a comprehensive solution that takes the
grocer out of the position of the recycler of last resort
along with a number of other changes to bring the
program into 2016 n
iStock
CA
LIF
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21
Dog chow n at u r a l plus vitamins amp minerals
is made with real chicken There ARE no artificial colors
and Yoshiloves itloves itloves it
I makeNO ARTIFICIALCOLORS OR PRESERVATIVES
MADEWITH Real Chicken
ldquo
rdquoBARBARA JDog Chow ProductionDavenport IA
I makeCOLORS OR PRESERVATIVES
New
Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA
reg
P E R S P E C T I V E
Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business
There are several proposed ballot measures that
may be on the November statewide ballot that
would make significant changes to Californiarsquos
minimum wage and tax laws This article takes
a brief look at the four competing tax increase
measures as well as two competing minimum
wage measures
COMPETING TAX INCREASE INITIATIVES FOR
2016 BALLOT
There are four competing tax increase measures
on this yearrsquos ballot They include
n A proposal by the California Hospital
Association and SEIU-UHW that would expand
and make permanent income tax increases
on Californiarsquos highest earners but also allow
Prop 30rsquos sales tax increase to expire in 2016
as scheduled
n A plan by SEIU-UHW and the California
Teachers Association that would extend the
income tax increases under Prop 30 until
2030 and would let the sales tax increase
expire in 2016 as scheduled
n A third measure would impose a significant
surcharge on property valued over $3 million
n A fourth measure would increase the tax on
tobacco products by $2 per pack
ldquoThe School Funding and Budget Stability Act
of 2016rdquo No 15-0065
This measure would extend until 112031 the
personal income tax rates established by Prop
30 and dedicate the funds entirely to schools
without the ability of the Legislature to suspend
or withhold funds even in a state budget crisis
The measure also exempts these funds from
the Statersquos Rainy Day Fund established by voters
in 2014 by Prop 2 (requiring a portion of state
revenues be allocated to the state budget reserve
and to paying down debt)
In Section 3 of the measure the following
statements of purpose and intent are set forth
ldquo(a) The chief purpose of this measure is to
protect our schools by temporarily extending
current income tax rates on wealthy
Californians instead of awarding a huge tax
break to couples earning more than half a
million dollars a year or individuals earning
more than a quarter million Instead of
sending money back into the pockets of the
wealthy this measure sends the money to a
special account that must be spent exclusively
on schools
ldquo(b) This measure is intended to keep California
on a track toward balanced budgets and
reliable funding for schools and community
colleges preventing a new round of
devastating cuts to public education and a
return to the days of chronic budget deficits
and funding cuts
ldquo(c) This measure guarantees in the Constitution
that the revenues it raises for schools will
be sent directly to school districts and
community colleges for classroom expenses
not administrative costs This school funding
cannot be suspended or withheld no matter
what happens with the state budgetrdquo
ldquoThe Invest in Californiarsquos Children Actrdquo
No 15-0070
This measure would make permanent the Prop
30 personal income tax rates after 2019 plus add
additional higher rates for those earning above
$1 million per year (individuals) or $2 million
(married filing jointly) with the highest bracket
of 143 percent and earmark the funds for
CHRIS MICHEL I
Legislative Advocate
Aprea amp Micheli Inc
Continued on p 24
CA
LIF
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23
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
|
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LIF
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24
P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
|
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Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
CA
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
CA
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WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
iStock
|
CA
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30
copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
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INA
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33
Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
LIF
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NIA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
NIA
GR
OC
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
LIF
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
OR
NIA
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
OR
NIA
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
P R E S I D E N T rsquo S M E S S A G E
Could Trump Bump Impact Senate RaceThe 2016 November General Election may be one of the most important and influential in some time In each issue of California Grocer leading up to the General Election I will examine the key national state and local races and their impact on our industry This issue Californiarsquos open Senate seat
Itrsquos been 24 years since the last open seat
Senate election in California Can you remember
who represented California prior to incumbent
Senators Diane Feinstein and Barbara Boxer My
guess is most canrsquot Last year Boxer said she was
throwing in the towel opening the door for a
new senator to be elected in November
Before examining the candidates letrsquos take a
quick look back at how we got here Boxer was
first elected to the Senate in 1992 the same
year Californiarsquos other Senator Diane Feinstein
took office after winning a special election to fill
the term left vacant by the resignation of Pete
Wilson Feinstein was re-elected in 1994 and has
served ever since
On the surface the race for Boxerrsquos seat appears
very low-key Itrsquos a safe bet that a Democrat
will retain this seat (Democrats enjoy an
overwhelming advantage right now in California)
And right now there is one clear leader in the
race Who challenges the frontrunner depends
on what happens in the June 7 primary Before I
explain letrsquos first look at the leading candidates
On the Democratic side California Attorney
General Kamala Harris and Congresswoman
Loretta Sanchez (46-CA) are the two top
frontrunners
As we go to press Harris enjoys a comfortable
lead over both her nearest party rival and
Republican challengers She has garnered the
endorsements of the California Democratic Party
State Controller Betty Yee State Treasurer John
Chiang Assembly Speaker Anthony Rendon and
the SEIU California to name a few Her total
campaign contribution nearly triples that of her
nearest contender Loretta Sanchez Harris would
be the first Indian-American and only the second
African-American woman senator
So what could make the June primary interesting
California uses a ldquojungle primaryrdquo system that
pits all candidates against each other regardless
of party in a primary race The top vote getters
go on to the general election
So while Harris appears a shoe-in for the
November ballot Sanchez is in danger of missing
the cut (not securing the second highest number
of votes in June) and watching the November
elections from the sidelines
A united Republican party is Sanchezrsquos biggest
concern If one GOP candidate runs in the
primary the party could steal the second
General Election ballot spot from Sanchez The
GOP took a major step in this direction when
Republican Senate candidate Rocky Chavez an
Oceanside assemblyman dropped out of the
race in early February
If Sanchez manages to secure the other ballot
spot this could set up a very interesting election
come November While Harrisrsquo numbers are
still considerably higher Sanchez stands to
become the first-ever Hispanic US Senator from
California a prospect that might have significant
appeal to the statersquos ever-growing Hispanic
population Sanchez also is considered more of a
moderate while Harris is seen as a solid liberal
The GOP on the other hand has not won a
Senate race in California since 1988 and any
contender will suffer the additional handicap
of running when the Democratic presidential
nominee is sure to carry California by a wide
margin maybe The wild card continues to be
RONALD FONG
PresidentCEO
|
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4
Donald Trump and his ability to rally the Republican
vote
The top Republican candidates include former state
GOP chair Tom Del Beccaro and George ldquoDufrdquo
Sundheim The GOP field got a little more crowded in
early March with wealthy Silicon Valley businessman
Ron Unz throwing his hat in the ring Unz ran for
Californian governor in 1994 and is probably best
know for authoring Proposition 227 which effectively
eliminated bilingual education in California
Even with a Trump ldquobumprdquo the chances of a Republican
securing Boxerrsquos seat seems like a long shot at best
The real question appears to be whether a more
conservative Democrat or a long-shot Republican
has any real chance of defeating Kamala Harris
Stay tuned n
Nielsen database-latest 52 weeks ending 41115
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F R O M T H E C H A I R
Growing People Growing GroceryCultivating the next generation of grocery leaders is a noble challenge worthy of our time energy and resources
The grocery business is an integral part of my
life I started working as a courtesy clerk at Bel
Air Market when I was 16 and joined Raleyrsquos
when the company was purchased in 1993
Sometimes the workplace was like a family
reunion for me ndash as many as 11 of my relatives
worked at Raleyrsquos or Bel Air at one point or
another Yoursquod probably describe my family as
having ldquogroceryrdquo in our blood
Irsquove stayed in the business because of the endless
doors of opportunity Prepared or perhaps
not I chose to walk through them and couldnrsquot
imagine working in any other industry Being in
the grocery business soon became my destiny
and I love what we do and who we serve
Of course working and growing the industry
isnrsquot limited to stocking products or managing
a department or supporting stores from the
corporate office We need produce buyers
growers farmers and manufacturers to provide
the food distributors and shippers to move it
from place to place and chefs to provide culinary
inspiration to create new in-store environments
for enjoying food
There are countless opportunities for young
people to join our industry and have a long
rewarding career but itrsquos up to us to find and
inspire them
How do we do that By connecting with young
people and providing resources to support them
in their pursuits
Letrsquos start by promoting STEM education ndash
Science Technology Engineering and Math ndash
for every student We need to fund scholarships
that make it easier for young people to advance
their learning
Our CGA Educational Foundation has supported
thousands of students in their educational
endeavors But most importantly by mentoring
the emerging stars in our communities and
sharing with them our success stories in the
grocery industry
CGA recently celebrated the careers of three
industry veterans Rob McDougall Donna
Tyndall and Bruce Wyatt at our annual Hall
of Achievement dinner They are outstanding
examples of leaders who have personally
invested their time talents and resources into
growing people who grow our companies and
our industry
Many companies in our great industry are
finding innovative ways to educate the industry
At Raleyrsquos wersquore reaching the next generation
through a program called ldquoWhere Your Food
Grows and Grazesrdquo which we developed
in cooperation with local ranchers and the
California Rangeland Trust
Students spend time on a ranch learning how
livestock are cared for and produce is grown and
then they tour one of our stores to find out more
about nutrition and our role in making fresh food
available to them Our goals are to inspire young
people to make good food choices and to share
our industryrsquos opportunities with them
Like farmers our job is to cultivate new talent
and watch it sprout The next generation of
leaders and innovators are out there waiting
for us to inspire them We can help this next
generation blossom grow and reap a harvest n
KEVIN KONKELCGA Chair of the Board
Senior Vice President Store Operations
Raleyrsquos Family of Fine Stores
|
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LIF
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Grocery Operations We Smooth lsquoem Out
Operational Eciency Greater Convenience More Money in Your Pocket
Cart Retrieval The industry leader in
shopping cart retrieval Reduce cart-loss expenses
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an accountable partner
Because we understand the details of grocery operations we can save you money and aggravation dealing with things youd rather not have to Come to us to simplify your operations and save money
Cart Maintenance Reduce cart cleaning and
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one-stop convenience Zero upfront costs or counting
and sorting hassles
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CSCRC and CCRC are RMS companies ndash 1020 North Lake St Burbank CA 91502
FOLLOW US ON SOCIAL MEDIA
wwwcartretrievalnet
V I E W P O I N T
The Shopping Path of Least Resistance It isnrsquot quite the replicator technology fantasized about by ldquoStar Trekrdquo ndash with which one could just say ldquoEarly Grey Hotrdquo to a computer and it would magically appear ndash but that doesnrsquot mean it canrsquot ndash and wonrsquot ndash change the world
The fact is I think it has the potential to do both
Earlier this year we learned that Samsung
had unveiled a new refrigerator at the annual
Consumer Electronics Show (CES) in Las Vegas
But this wasnrsquot just a refrigerator It was a
ldquosmartrdquo refrigerator
Called the Family Hub Refrigerator this piece of
equipment comes with a 215-inch touchscreen
on one of its doors which people can use
to shop for products as they run low or out
Even more impressive the refrigerator also has
cameras inside that keep track of products as
they are removed so it can let people know
when supplies are running low And people
can access all this information from their smart
phones and use them to place orders
Wow Irsquom old enough to remember when
refrigerators didnrsquot even have automatic
defrosting (Young people reading this will have
to trust me on this We used to have to unplug
freezers and refrigerators and put pots of hot
water inside in order to defrost them It was a
total pain in the neck but a routine part of life
(Barbaric huh)
Samsung said that it has partnered with
MasterCard to provide payment services and
to start with MyWebGrocer FreshDirect and
ShopRite for online grocery ordering Needless
to say these platforms are thrilled
ldquoCommerce-enabled devices like the Family
Hub refrigerator represent an unprecedented
opportunity for our customers because it puts
them right where the consumer path to purchase
begins in the kitchenrdquo said Eric Healy president
of MyWebGrocer And Jodi Kahn FreshDirectrsquos
Chief Consumer Officer observed that it created
a ldquofrictionlessrdquo and ldquoseamlessrdquo road between
shopper and shop
Bingo
Not long after Samsung made its announcement
I got an email from Amazon promoting a new
item available on the site ndash a Brita water pitcher
that comes with a filter that enables the consumer
to have cleaner better-tasting water
Except that this was a pitcher with a curveball
ndash because this Brita pitcher is WiFi enabled
KEVIN COUPEFounder
MorningNewsBeatcom
Commerce-enabled devices like the Family Hub Refrigerator represent an unprecedented opportunity for our customers because it puts them right where the consumer path to purchasebegins in the kitchen
iStock
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LIF
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OC
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8
V I E W P O I N T
It comes the email said ldquoequipped with a built-in
counter that tracks the amount of water that passes
through the pitcherrsquos filter The pitcher itself will
automatically order a new filter through Amazon Dash
Replenishment when the old filter nears its capacity
This new connected pitcher with Amazon Dash
Replenishment gives Brita owners exactly what they
want ndash a new Brita filter on their doorstep at the time
they need itrdquo
Pretty cool
(Irsquom tempted here to tell younger readers that I can
remember a time when we had to fetch water from
the well with a bucket and a rope but Irsquom not quite
that old)
The Brita Infinity Pitcher will cost about 45 bucks
which seems to be about a third more expensive than
most of the Brita pitchers that I found on Amazon
but the argument is that the tech-driven convenience
will make the price difference palatable And I have to
say that I think the argument is pretty compelling Or
to coin a phrase it is an argument that holds water
Innovations along these lines have been much
discussed over the years and it only was a matter of
time before dreams and reality met in such a way
that products like these could become mainstream
Without a doubt wersquore pretty much there products
like the Family Hub Refrigerator or Amazonrsquos
ecosystem-centric strategies (which are tied to the
Echo Subscribe-and-Save the Dash replenishment
system and even the delivery drones that probably
will be flying over our homes one of these days) are
putting us right in the middle of what could turn out
to be a pretty remarkable time And retailers have to
be prepared to embrace this revolution which almost
certainly will unfold faster than anyone expects
Interestingly Ford and Amazon announced at CES that
they are working on an initiative ldquogranting Ford owners
unprecedented access to their connected-home devices
from their cars and vice versardquo
And the Amazon ecosystem expands a little more
What is important to remember here is that once one
buys a refrigerator or a water pitcher it usually will be
quite some time before you have to replace them The
refrigerator only has value if it is filled with food that
you want to eat and the pitcher only has value if you
have the filters that create cleaner tastier water And
so it is critical for companies like Samsung and Brita
to find ways to be more relevant and useful which is
exactly what theyrsquove done
One of the things that traditional retailers have to
realize is that the advent of smart appliances and the
expanding ecosystems being created by some retailer
platforms ndash especially but not limited to Amazon ndash
are combining to create an environment in which it
is less and less necessary for people to actually go to
the store These progressive-minded companies are
creating paths of least resistance that provide few
reasons for consumers to detour elsewhere
Not everybody and not all the time But enough to
have an impact on a lot of bottom lines
One of the things that one finds a lot at food industry
conferences is people who like to cast doubt on the
e-revolution They like to talk about the people who
still want to go to the store about the hiccups that
can affect click-and-collect or delivery services about
how rural customers have different needs than urban
customers and about how selling points like ldquoyour
neighborhood grocerrdquo or ldquohometown proudrdquo or
ldquoold-fashioned servicerdquo or similar tropes are enough
for retailers to hang their hats on when competing in
this new environment
All of this may in fact be true And still not enough
to stave off the impact of technology especially on a
generation of shoppers that does not remember those
ancient pre-Amazon days
Not all people and not all the time But enough to
create leaks in the traditional market shares of a lot
of retailers and manufacturers Leaks that are likely to
grow bigger with time
The future is coming And it is traveling at Warp Eight n
One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution
CA
LIF
OR
NIA
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OC
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A N
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AL
IFO
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Grocers Converge on Sacramento
Grocery retailers and their supplier partners from
throughout California gathered in Sacramento in
late March to share business concerns with their
state representatives on key issues facing the
grocery industry
The face-to-face meetings with the majority of state
legislators highlighted the 2016 CGA Grocers Day
at the Capitol the Associationrsquos one-day member
advocacy event at the Statersquos Capitol
ldquoThis was a critical year for our members to
participate in CGArsquos premier member lobbying
activityrdquo said CGA President Ron Fong ldquoOur
members really stepped up and did a tremendous job
of sharing our story and providing valuable insight
into how our businesses operaterdquo
In addition to the face-to-face meetings attendees
heard from Gov Jerry Brown who addressed a
number of topics including the deal struck with labor
leaders over Easter weekend to introduce legislation
that will raise the statersquos minimum wage to $15
The governor said a deal needed to be struck as
an alternative to a minimum wage proposition
on the November ballot that would be even more
burdensome on Californiarsquos business community
The Governorrsquos remarks were met with skepticism
by the Association who later released a statement
chiding the governor for not including the business
community in its meeting with labor
ldquoOur members are dismayed at the events of the
past three daysrdquo Fong said in a written statement to
the media ldquoMajority Democrats and the Governor
(l to r) Jonathan Mayes Albertsons Kendra Doyel Ralphs Gov Jerry Brown Diana Godfrey Smart amp Final Ron Fong CGA
(l to r) Charla Giles Save Mart Supermarket Assemblymember Rudy Salas Michel LeClerc North State Grocery Inc Dave Madden MillerCoors
(l to r) Sen Richard Roth Mary Connelly Costco Eric Lindberg Jr Grocery Outlet Inc
CG
A N
EW
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AL
IFO
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IA G
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11
rammed a $5 increase in Californiarsquos minimum
wage through the entire legislative process in
just three days They did so without meaningful
conversation or an opportunity for businesses that
will bear the cost burden to weigh in on the issuerdquo
Attendees were also briefed by CGA staff on the key
issues they would discuss during their legislative
visits These topics included employee scheduling
wine coupons food bank donation tax credits and
the statersquos beleaguered beverage container recycling
program
Following an afternoon of legislative meetings
CGA hosted its annual Presidentrsquos Reception that
allowed Grocers Day attendees to meet again with
state legislators and staff but in a more relaxed
environment
CGA also hosted its popular Ice Cream Social
located this year inside the State Capitol and was
sponsored by Clover Stornetta Farms which provided
the ice cream n
The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day
Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc
Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc
Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final
Breakfast Kellogg Company Save Mart Supermarkets
Luncheon Jelly Belly Candy Co
Ice Cream Social Clover Stornetta Farms Inc
Presidentrsquos Reception Command Packaging MillerCoors
Legislative visits highlighted CGArsquos Grocers Day at the Capitol
Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social
Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA
CG
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IFO
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Foundation Selects New Trustee ChairBrad Askeland Vice President
Holiday Markets has
been elected Chair of the
California Grocers Association
Educational Foundation
Board of Trustees Askeland
had previously served as
Foundation Vice Chair
Askeland succeeds former CGAEF Chair Jim Van
Gorkom NuCal Foods who served in that position
since 2011 Mark Johnson Unified Grocers Inc was
elected to replace Askeland as the Boardrsquos Vice Chair
Jacquie Slobom Gelsonrsquos Markets and Jerry Landers
Raleyrsquos will continue as the Foundationrsquos Secretary
and Treasurer respectively
ldquoWe look forward to Brad building on the programs
Jim was instrumental in fosteringrdquo said CGAEF
President Ron Fong
Askelandrsquos responsibilities will be to guide and direct
the CGAEF Board of Trustees The Foundation
was created in 1992 to advance Californiarsquos grocery
industry through employee education industry
research and recognition of excellence
Askeland who has served as a Trustee since 2009
began his grocery career in 1988 as a courtesy clerk
for a small independent market before joining
North State Grocery Inc in 1995 He managed
several stores before being named director of human
resources in 2003 n
SEC Store Tour Features Draegerrsquos MarketThe California
Grocers Associationrsquo
Supplier Executive
Council kicked off
its 2016 Store Tour
series in March at
Draegerrsquos Market in
San Mateo The tour
was led by Richard
Draeger chief
operations officer
for the company
The Draeger executive led the SEC members on an
aisle-by-aisle tour sharing his companyrsquos business
philosophy and strategy Draeger told attendees that
for his company itrsquos not about having the lowest
prices but ldquomaking things easier for the consumerrdquo
He added that shopping local is what makes
Draegerrsquos different
Following the tour SEC members were treated to
a luncheon hosted by Draegerrsquos popular in-store
cooking school To learn more about becoming
an SEC member contact Sunny Porter CGA
at (916) 448-3545 n
New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER
Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes
Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom
Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo
2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916
The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals
CMYKFOCUS ON ALLERGENSTopical educational sessions and resources
June 5 - 7 | Houston
FOR MORE INFORMATION IDDBAORG 6083105000
REGISTER TODAYEXPANDED EXPO HOURS
NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths
SHOW amp SELL CENTERCAKE DECORATING CHALLENGE
MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH
JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain
CG
A N
EW
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AL
IFO
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CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in
March the second ldquotoolrdquo in its Grocery Compliance
Toolkit ndash this one focused on the Americans with
Disabilities Act
CGA contracted with the Sacramento-based law firm
of Downey Brand LLP to create a comprehensive
user-friendly ADA compliance guideline In addition
CGA hosted two regional seminars in conjunction
with the release of the ADA compliance ldquotoolrdquo In
addition the CGA Educational Foundation hosted a
one-hour webinar conducted by Downey Brand that
outlined the specifics of complying with the ADA
ldquoCalifornia grocers are increasingly seen as great
targets for opportunistic drive-by ADA public
access lawsuitsrdquo said CGA President Ron Fong
ldquoDespite recent changes to law serial plaintiffs
continue to send demand letters and file frivolous
lawsuits against grocers in an attempt to extract
monetary settlements We created this toolkit to
help retailers fend off these lawsuitsrdquo
The Grocery Compliance Toolkit was created as
a CGA member benefit to help grocery retailers
understand and manage the risks associated with
complying with state regulations related to the
grocery industry
The first ldquotoolrdquo was released last year and focused
on hazardous waste disposal
CGA members can download both the ADA and
hazardous waste disposal ldquotoolsrdquo from CGArsquos website
wwwcagrocerscom along with viewing both
seminars
CGA will release additional compliance ldquotoolsrdquo in the
coming months n
2014 2015
Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM
Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years
VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA
SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION
For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute
llaacutemenos o visite nuestra pagina de internet
Variety is the spice of lifeEnjoy it with our award winning
premium authentic line of cheeses
While that may hold true in the Lone Star State our
friends from Texas may be shocked to find that the
middle of the road in California is a relatively safe
place to be But finding safety on those center lines
wasnrsquot always so easy
Open primaries and the rise of the moderates
particularly on the Democratic side of the aisle have
widened that middle of the road from a dangerously
thin series of narrow yellow stripes to a ten-foot
wide median safe from most passing traffic
In a nation that divides its states into a red column
(for Republicans) and a blue column (for Democrats)
California exists solidly in the blue column with
Democrats holding every statewide office as well as
near supermajorities in both legislative houses
However a closer look reveals unexpected patches of
purple dotting the political map
Within these purple areas are a number of legislative
districts that reflect a uniquely Californian political
identity ndash a laissez faire attitude on social issues
mixed with a more conservative middle-of-the-road
view towards taxes and regulation
It was the voters in these areas the backers of
Proposition 14 had in mind back in 2010 when they
successfully pressed for passage of this initiative
to bring open primaries to California effectively
changing the game of legislative elections in our state
The rationale for passage was simple
In an overall political climate that often forced
candidates to the far-left and far-right during
primary elections in order to cater to the base to
win their partyrsquos nomination the general election
would often leave middle-of-the-road voters from
both parties (as well as independents) with no viable
candidates to support
GO
VE
RN
ME
NT
RE
LA
TIO
NS
Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD
BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo
In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses
Continued on p 18
Aaron Moreno Senior Director
Government Relations CGA
iStock
CA
LIF
OR
NIA
GR
OC
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If all candidates stood for primary election at the
same time with all voters choosing the top-two vote
getters for the general election regardless of party
open primary backers reasoned that candidates
would have to broaden their appeal to all voters in
a legislative district not to just the ldquotrue believersrdquo
who often decided primary elections The result
would be more moderate legislators be they
Democrat or Republican
This has been the case as
illustrated by the elections
of Republicans Catherine
Baker and David Hadley
in Assembly districts that
had elected Democrats in
previous election cycles Both
won due to their willingness
and ability to speak to voters from
both parties from the primary all the way
to the general election This would not have been
possible without open primaries
The open primary has not only changed the strategy
of candidates looking to enter the Legislature it
has also changed the way interest groups develop
strategies to elect legislators that best represent their
world views
Californiarsquos business interests have been particularly
savvy in adapting to these changes by adopting
strategies for supporting legislative candidates
that were once unheard of There was once a time
when it was automatic that these business interests
only backed Republican candidates This has
changed particularly in districts with a majority of
Democratic voters
In these districts it is not uncommon to see a
general election featuring two Democrats These
types of races provide a perfect synergy between
Democrats running from a more moderate position
and business interests who see a benefit from having
such political perspectives in the Legislature
This new breed of moderate Democrat would
have found it hard to advance out of a traditional
Democratic primary where the winner was decided
by the hard-core base
In the open primary system a moderate Democrat
can not only survive but thrive making it to the
general election by taking positions that appeal not
just to their fellow Democrats but to decline-to-state
and even moderate Republican voters
While remaining socially liberal like more
traditional Democrats moderates stand apart
by taking firm stances against new taxes and
unnecessary government regulation ndash two views
that align them with business interests
around the state
And the business community
has taken note spending
millions of dollars over the
past few years either in direct
donations to candidates
or the establishment of
political action committees
spending on behalf of
a candidate to elect more
moderate Democrats This has had
a big impact on the Legislature particularly in the
Assembly where the informal but highly influential
Moderate Caucus holds sway
Numbering anywhere from 10 to 15 depending on
who you ask and what is up for a vote on a particular
day this bloc of Democrats led by Assemblymembers
Rudy Salas from Bakersfield and Jim Cooper from
Sacramento have had considerable success helping
the business community in recent years by using
their influence to either water down legislation that
would adversely affect business preventing such
bills from being voted on by the full Assembly
or voting with Republicans to kill anti-business
legislation
Some notable business victories facilitated by the
Moderate Democrats during last yearrsquos legislative
DEM
REP
The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views
Continued from p 17
G O V E R N M E N T R E L AT I O N SCONTINUED
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G O V E R N M E N T R E L AT I O N S
session were the defeat of legislation that would
have required a 50 percent reduction in petroleum
use in motor vehicles the preventing of legislation
increasing the minimum wage from being heard on
the Assembly Floor and the preventing of legislation
requiring predictive scheduling from also being
heard on the Assembly Floor among others
Business groups such as CGA and others have
benefitted from supporting the candidacies of
these Moderate Democrats While their support
is certainly not 100 percent even their support 50
to 60 percent of the time is enough to stave off the
seemingly never-ending onslaught of legislation that
has the potential to put a damper on the business
climate in California
Those percentages may not seem like much but
when you consider that without open primaries the
Democrats coming from these same Democratic
majority districts would often stand with business
20 percent of the time or less the value of Moderate
Democrats to business is high
So while the middle of the road in Texas may be
nothing more than road kill armadillos and yellow
stripes the medians in California are wide berths
that provide a cushion for business from forces that
donrsquot necessarily have their best interests in mind
We must all do our part to keep that cushion in
place The election of Moderate Democrats whenever
possible is a great way to do so n
Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto
Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats
July 27-28 2016
Register today at
wwwfresnofoodexpocom
For more information contact
Amy Fuentes at 559-227-9999
or infofresnofoodexpocom
Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much
more than just a trade show The Fresno Food Expo is a celebration of Central
Californiarsquos vibrant food community and a showcase of our regionrsquos most
innovative food and beverage producers
Whether you are sourcing for fresh product deli baked goods or beer and wine
the Fresno Food Expo is your opportunity to connect with local trendsetters and
CEOrsquos behind some of the nationrsquos largest food companies right in their backyard
Come sit at our table and join us for an experience
you wonrsquot find anywhere else
Discover the abundance of Central Californiarsquos Food Region
FREE Buyer Registration
raquo Grower amp Manufacturer Site Tours
raquo VIP Event amp Opening Reception
raquo Buyerrsquos Breakfast
raquo Business to Business Trade Show
Your registration includes access to the following events
FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo
C A P I T O L I N S I D E R
Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program
Californiarsquos Beverage Container Recycling
Program was created by legislation 30 years ago
At that time recycling was a new word and the
intent of the program was to change
consumer habit Glass and aluminum
containers were sold with a surcharge
which the consumer would receive
back if they returned the containers
In that day and age people
commonly purchased six-packs
of glass soda bottles from
their grocery store They were
encouraged to bring those
glass containers back to the
store and exchange them
for the next six-pack they
purchased The convenience
of bringing containers back to
the store was the impetus for
the convenience zones created
by the law
At that time curbside recycling
didnrsquot exist nor were there
any real markets for recycled
material
Over the years a lot has
changed in California
Our communities are different
The definition of convenience
has changed Industries reliant
on manufacturing with recycled
materials have been born and are
thriving Most important we have
changed the Californiarsquos throw away culture to
one focused on recycling and reuse
Yet Californiarsquos Bottle Bill has failed to keep up
with the times
Today the perfect storm is brewing
A number of California communities are revolting
against convenience zone recyclers placing fees
and others obstacles before them in an
effort to keep them away
These recyclers while generating the
majority of containers returned through
the program attract patrons that many
community leaders and grocery store
customers prefer not to see in the
parking lot of their local grocery
store
Petroleum prices have driven the
scrap price for plastic to a historic
low making recycled content more
expensive than virgin product
In addition the formula Cal Recycle
uses to determine the overall cost
of recycling has failed to accurately
capture recent increases in minimum
wage and other cost factors These
three elements combined have made
it nearly impossible for convenience
zone recyclers to remain in business
This is evident by the announcement
from RePlanet the Statersquos largest
convenience zone recycler in late
January to decertify 200 locations in
Northern California
The decertification of convenience
zones starts a process for Cal Recycle
First they are required to review the zones
where each site was located They can either
choose to exempt the zone from further service
or change the status of the zone from served to
unserved
LOUIE BROWN
Partner in the
Sacramento office
of Kahn Soares and
Conway LLP
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C A P I T O L I N S I D E R
The decision to change a zone to unserved triggers an
announcement by Cal Recycle to all dealers in the zone
that they have 30 days to decide to take containers back
in the store or pay the $100 per day ldquoin lieurdquo fee
Cal Recycle is evaluating the zones impacted by the
decertification of RePlanet Since the number of
exempted zones is capped by statute it is expected Cal
Recycle will be forced to change the status on a large
number of zones to unserved and likely impact hundreds
of dealers in northern California This process is expected
to take the next 90 to 120 days to complete
In the meantime CGA and others are developing a
legislative strategy to address these issues before grocers
are required to take action Your legislative team is
focused on a comprehensive solution that takes the
grocer out of the position of the recycler of last resort
along with a number of other changes to bring the
program into 2016 n
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21
Dog chow n at u r a l plus vitamins amp minerals
is made with real chicken There ARE no artificial colors
and Yoshiloves itloves itloves it
I makeNO ARTIFICIALCOLORS OR PRESERVATIVES
MADEWITH Real Chicken
ldquo
rdquoBARBARA JDog Chow ProductionDavenport IA
I makeCOLORS OR PRESERVATIVES
New
Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA
reg
P E R S P E C T I V E
Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business
There are several proposed ballot measures that
may be on the November statewide ballot that
would make significant changes to Californiarsquos
minimum wage and tax laws This article takes
a brief look at the four competing tax increase
measures as well as two competing minimum
wage measures
COMPETING TAX INCREASE INITIATIVES FOR
2016 BALLOT
There are four competing tax increase measures
on this yearrsquos ballot They include
n A proposal by the California Hospital
Association and SEIU-UHW that would expand
and make permanent income tax increases
on Californiarsquos highest earners but also allow
Prop 30rsquos sales tax increase to expire in 2016
as scheduled
n A plan by SEIU-UHW and the California
Teachers Association that would extend the
income tax increases under Prop 30 until
2030 and would let the sales tax increase
expire in 2016 as scheduled
n A third measure would impose a significant
surcharge on property valued over $3 million
n A fourth measure would increase the tax on
tobacco products by $2 per pack
ldquoThe School Funding and Budget Stability Act
of 2016rdquo No 15-0065
This measure would extend until 112031 the
personal income tax rates established by Prop
30 and dedicate the funds entirely to schools
without the ability of the Legislature to suspend
or withhold funds even in a state budget crisis
The measure also exempts these funds from
the Statersquos Rainy Day Fund established by voters
in 2014 by Prop 2 (requiring a portion of state
revenues be allocated to the state budget reserve
and to paying down debt)
In Section 3 of the measure the following
statements of purpose and intent are set forth
ldquo(a) The chief purpose of this measure is to
protect our schools by temporarily extending
current income tax rates on wealthy
Californians instead of awarding a huge tax
break to couples earning more than half a
million dollars a year or individuals earning
more than a quarter million Instead of
sending money back into the pockets of the
wealthy this measure sends the money to a
special account that must be spent exclusively
on schools
ldquo(b) This measure is intended to keep California
on a track toward balanced budgets and
reliable funding for schools and community
colleges preventing a new round of
devastating cuts to public education and a
return to the days of chronic budget deficits
and funding cuts
ldquo(c) This measure guarantees in the Constitution
that the revenues it raises for schools will
be sent directly to school districts and
community colleges for classroom expenses
not administrative costs This school funding
cannot be suspended or withheld no matter
what happens with the state budgetrdquo
ldquoThe Invest in Californiarsquos Children Actrdquo
No 15-0070
This measure would make permanent the Prop
30 personal income tax rates after 2019 plus add
additional higher rates for those earning above
$1 million per year (individuals) or $2 million
(married filing jointly) with the highest bracket
of 143 percent and earmark the funds for
CHRIS MICHEL I
Legislative Advocate
Aprea amp Micheli Inc
Continued on p 24
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23
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
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CA
LIF
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24
P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
|
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26
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Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
CA
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WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
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copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
LUM
INA
TO
RS
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Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
|
CA
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
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NIA
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OC
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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GR
OC
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
CA
LIF
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GR
OC
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
LIF
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NIA
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OC
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
NIA
GR
OC
ER
46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
OR
NIA
GR
OC
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
GR
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
Donald Trump and his ability to rally the Republican
vote
The top Republican candidates include former state
GOP chair Tom Del Beccaro and George ldquoDufrdquo
Sundheim The GOP field got a little more crowded in
early March with wealthy Silicon Valley businessman
Ron Unz throwing his hat in the ring Unz ran for
Californian governor in 1994 and is probably best
know for authoring Proposition 227 which effectively
eliminated bilingual education in California
Even with a Trump ldquobumprdquo the chances of a Republican
securing Boxerrsquos seat seems like a long shot at best
The real question appears to be whether a more
conservative Democrat or a long-shot Republican
has any real chance of defeating Kamala Harris
Stay tuned n
Nielsen database-latest 52 weeks ending 41115
bull Multi-Million Dollar National Advertisingbull 1 All-Natural Jerkybull Bringing New Customers to the Category
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F R O M T H E C H A I R
Growing People Growing GroceryCultivating the next generation of grocery leaders is a noble challenge worthy of our time energy and resources
The grocery business is an integral part of my
life I started working as a courtesy clerk at Bel
Air Market when I was 16 and joined Raleyrsquos
when the company was purchased in 1993
Sometimes the workplace was like a family
reunion for me ndash as many as 11 of my relatives
worked at Raleyrsquos or Bel Air at one point or
another Yoursquod probably describe my family as
having ldquogroceryrdquo in our blood
Irsquove stayed in the business because of the endless
doors of opportunity Prepared or perhaps
not I chose to walk through them and couldnrsquot
imagine working in any other industry Being in
the grocery business soon became my destiny
and I love what we do and who we serve
Of course working and growing the industry
isnrsquot limited to stocking products or managing
a department or supporting stores from the
corporate office We need produce buyers
growers farmers and manufacturers to provide
the food distributors and shippers to move it
from place to place and chefs to provide culinary
inspiration to create new in-store environments
for enjoying food
There are countless opportunities for young
people to join our industry and have a long
rewarding career but itrsquos up to us to find and
inspire them
How do we do that By connecting with young
people and providing resources to support them
in their pursuits
Letrsquos start by promoting STEM education ndash
Science Technology Engineering and Math ndash
for every student We need to fund scholarships
that make it easier for young people to advance
their learning
Our CGA Educational Foundation has supported
thousands of students in their educational
endeavors But most importantly by mentoring
the emerging stars in our communities and
sharing with them our success stories in the
grocery industry
CGA recently celebrated the careers of three
industry veterans Rob McDougall Donna
Tyndall and Bruce Wyatt at our annual Hall
of Achievement dinner They are outstanding
examples of leaders who have personally
invested their time talents and resources into
growing people who grow our companies and
our industry
Many companies in our great industry are
finding innovative ways to educate the industry
At Raleyrsquos wersquore reaching the next generation
through a program called ldquoWhere Your Food
Grows and Grazesrdquo which we developed
in cooperation with local ranchers and the
California Rangeland Trust
Students spend time on a ranch learning how
livestock are cared for and produce is grown and
then they tour one of our stores to find out more
about nutrition and our role in making fresh food
available to them Our goals are to inspire young
people to make good food choices and to share
our industryrsquos opportunities with them
Like farmers our job is to cultivate new talent
and watch it sprout The next generation of
leaders and innovators are out there waiting
for us to inspire them We can help this next
generation blossom grow and reap a harvest n
KEVIN KONKELCGA Chair of the Board
Senior Vice President Store Operations
Raleyrsquos Family of Fine Stores
|
CA
LIF
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V I E W P O I N T
The Shopping Path of Least Resistance It isnrsquot quite the replicator technology fantasized about by ldquoStar Trekrdquo ndash with which one could just say ldquoEarly Grey Hotrdquo to a computer and it would magically appear ndash but that doesnrsquot mean it canrsquot ndash and wonrsquot ndash change the world
The fact is I think it has the potential to do both
Earlier this year we learned that Samsung
had unveiled a new refrigerator at the annual
Consumer Electronics Show (CES) in Las Vegas
But this wasnrsquot just a refrigerator It was a
ldquosmartrdquo refrigerator
Called the Family Hub Refrigerator this piece of
equipment comes with a 215-inch touchscreen
on one of its doors which people can use
to shop for products as they run low or out
Even more impressive the refrigerator also has
cameras inside that keep track of products as
they are removed so it can let people know
when supplies are running low And people
can access all this information from their smart
phones and use them to place orders
Wow Irsquom old enough to remember when
refrigerators didnrsquot even have automatic
defrosting (Young people reading this will have
to trust me on this We used to have to unplug
freezers and refrigerators and put pots of hot
water inside in order to defrost them It was a
total pain in the neck but a routine part of life
(Barbaric huh)
Samsung said that it has partnered with
MasterCard to provide payment services and
to start with MyWebGrocer FreshDirect and
ShopRite for online grocery ordering Needless
to say these platforms are thrilled
ldquoCommerce-enabled devices like the Family
Hub refrigerator represent an unprecedented
opportunity for our customers because it puts
them right where the consumer path to purchase
begins in the kitchenrdquo said Eric Healy president
of MyWebGrocer And Jodi Kahn FreshDirectrsquos
Chief Consumer Officer observed that it created
a ldquofrictionlessrdquo and ldquoseamlessrdquo road between
shopper and shop
Bingo
Not long after Samsung made its announcement
I got an email from Amazon promoting a new
item available on the site ndash a Brita water pitcher
that comes with a filter that enables the consumer
to have cleaner better-tasting water
Except that this was a pitcher with a curveball
ndash because this Brita pitcher is WiFi enabled
KEVIN COUPEFounder
MorningNewsBeatcom
Commerce-enabled devices like the Family Hub Refrigerator represent an unprecedented opportunity for our customers because it puts them right where the consumer path to purchasebegins in the kitchen
iStock
|
CA
LIF
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OC
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8
V I E W P O I N T
It comes the email said ldquoequipped with a built-in
counter that tracks the amount of water that passes
through the pitcherrsquos filter The pitcher itself will
automatically order a new filter through Amazon Dash
Replenishment when the old filter nears its capacity
This new connected pitcher with Amazon Dash
Replenishment gives Brita owners exactly what they
want ndash a new Brita filter on their doorstep at the time
they need itrdquo
Pretty cool
(Irsquom tempted here to tell younger readers that I can
remember a time when we had to fetch water from
the well with a bucket and a rope but Irsquom not quite
that old)
The Brita Infinity Pitcher will cost about 45 bucks
which seems to be about a third more expensive than
most of the Brita pitchers that I found on Amazon
but the argument is that the tech-driven convenience
will make the price difference palatable And I have to
say that I think the argument is pretty compelling Or
to coin a phrase it is an argument that holds water
Innovations along these lines have been much
discussed over the years and it only was a matter of
time before dreams and reality met in such a way
that products like these could become mainstream
Without a doubt wersquore pretty much there products
like the Family Hub Refrigerator or Amazonrsquos
ecosystem-centric strategies (which are tied to the
Echo Subscribe-and-Save the Dash replenishment
system and even the delivery drones that probably
will be flying over our homes one of these days) are
putting us right in the middle of what could turn out
to be a pretty remarkable time And retailers have to
be prepared to embrace this revolution which almost
certainly will unfold faster than anyone expects
Interestingly Ford and Amazon announced at CES that
they are working on an initiative ldquogranting Ford owners
unprecedented access to their connected-home devices
from their cars and vice versardquo
And the Amazon ecosystem expands a little more
What is important to remember here is that once one
buys a refrigerator or a water pitcher it usually will be
quite some time before you have to replace them The
refrigerator only has value if it is filled with food that
you want to eat and the pitcher only has value if you
have the filters that create cleaner tastier water And
so it is critical for companies like Samsung and Brita
to find ways to be more relevant and useful which is
exactly what theyrsquove done
One of the things that traditional retailers have to
realize is that the advent of smart appliances and the
expanding ecosystems being created by some retailer
platforms ndash especially but not limited to Amazon ndash
are combining to create an environment in which it
is less and less necessary for people to actually go to
the store These progressive-minded companies are
creating paths of least resistance that provide few
reasons for consumers to detour elsewhere
Not everybody and not all the time But enough to
have an impact on a lot of bottom lines
One of the things that one finds a lot at food industry
conferences is people who like to cast doubt on the
e-revolution They like to talk about the people who
still want to go to the store about the hiccups that
can affect click-and-collect or delivery services about
how rural customers have different needs than urban
customers and about how selling points like ldquoyour
neighborhood grocerrdquo or ldquohometown proudrdquo or
ldquoold-fashioned servicerdquo or similar tropes are enough
for retailers to hang their hats on when competing in
this new environment
All of this may in fact be true And still not enough
to stave off the impact of technology especially on a
generation of shoppers that does not remember those
ancient pre-Amazon days
Not all people and not all the time But enough to
create leaks in the traditional market shares of a lot
of retailers and manufacturers Leaks that are likely to
grow bigger with time
The future is coming And it is traveling at Warp Eight n
One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution
CA
LIF
OR
NIA
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OC
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CG
A N
EW
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AL
IFO
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IA G
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Grocers Converge on Sacramento
Grocery retailers and their supplier partners from
throughout California gathered in Sacramento in
late March to share business concerns with their
state representatives on key issues facing the
grocery industry
The face-to-face meetings with the majority of state
legislators highlighted the 2016 CGA Grocers Day
at the Capitol the Associationrsquos one-day member
advocacy event at the Statersquos Capitol
ldquoThis was a critical year for our members to
participate in CGArsquos premier member lobbying
activityrdquo said CGA President Ron Fong ldquoOur
members really stepped up and did a tremendous job
of sharing our story and providing valuable insight
into how our businesses operaterdquo
In addition to the face-to-face meetings attendees
heard from Gov Jerry Brown who addressed a
number of topics including the deal struck with labor
leaders over Easter weekend to introduce legislation
that will raise the statersquos minimum wage to $15
The governor said a deal needed to be struck as
an alternative to a minimum wage proposition
on the November ballot that would be even more
burdensome on Californiarsquos business community
The Governorrsquos remarks were met with skepticism
by the Association who later released a statement
chiding the governor for not including the business
community in its meeting with labor
ldquoOur members are dismayed at the events of the
past three daysrdquo Fong said in a written statement to
the media ldquoMajority Democrats and the Governor
(l to r) Jonathan Mayes Albertsons Kendra Doyel Ralphs Gov Jerry Brown Diana Godfrey Smart amp Final Ron Fong CGA
(l to r) Charla Giles Save Mart Supermarket Assemblymember Rudy Salas Michel LeClerc North State Grocery Inc Dave Madden MillerCoors
(l to r) Sen Richard Roth Mary Connelly Costco Eric Lindberg Jr Grocery Outlet Inc
CG
A N
EW
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IFO
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IA G
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11
rammed a $5 increase in Californiarsquos minimum
wage through the entire legislative process in
just three days They did so without meaningful
conversation or an opportunity for businesses that
will bear the cost burden to weigh in on the issuerdquo
Attendees were also briefed by CGA staff on the key
issues they would discuss during their legislative
visits These topics included employee scheduling
wine coupons food bank donation tax credits and
the statersquos beleaguered beverage container recycling
program
Following an afternoon of legislative meetings
CGA hosted its annual Presidentrsquos Reception that
allowed Grocers Day attendees to meet again with
state legislators and staff but in a more relaxed
environment
CGA also hosted its popular Ice Cream Social
located this year inside the State Capitol and was
sponsored by Clover Stornetta Farms which provided
the ice cream n
The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day
Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc
Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc
Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final
Breakfast Kellogg Company Save Mart Supermarkets
Luncheon Jelly Belly Candy Co
Ice Cream Social Clover Stornetta Farms Inc
Presidentrsquos Reception Command Packaging MillerCoors
Legislative visits highlighted CGArsquos Grocers Day at the Capitol
Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social
Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA
CG
A N
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IFO
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Foundation Selects New Trustee ChairBrad Askeland Vice President
Holiday Markets has
been elected Chair of the
California Grocers Association
Educational Foundation
Board of Trustees Askeland
had previously served as
Foundation Vice Chair
Askeland succeeds former CGAEF Chair Jim Van
Gorkom NuCal Foods who served in that position
since 2011 Mark Johnson Unified Grocers Inc was
elected to replace Askeland as the Boardrsquos Vice Chair
Jacquie Slobom Gelsonrsquos Markets and Jerry Landers
Raleyrsquos will continue as the Foundationrsquos Secretary
and Treasurer respectively
ldquoWe look forward to Brad building on the programs
Jim was instrumental in fosteringrdquo said CGAEF
President Ron Fong
Askelandrsquos responsibilities will be to guide and direct
the CGAEF Board of Trustees The Foundation
was created in 1992 to advance Californiarsquos grocery
industry through employee education industry
research and recognition of excellence
Askeland who has served as a Trustee since 2009
began his grocery career in 1988 as a courtesy clerk
for a small independent market before joining
North State Grocery Inc in 1995 He managed
several stores before being named director of human
resources in 2003 n
SEC Store Tour Features Draegerrsquos MarketThe California
Grocers Associationrsquo
Supplier Executive
Council kicked off
its 2016 Store Tour
series in March at
Draegerrsquos Market in
San Mateo The tour
was led by Richard
Draeger chief
operations officer
for the company
The Draeger executive led the SEC members on an
aisle-by-aisle tour sharing his companyrsquos business
philosophy and strategy Draeger told attendees that
for his company itrsquos not about having the lowest
prices but ldquomaking things easier for the consumerrdquo
He added that shopping local is what makes
Draegerrsquos different
Following the tour SEC members were treated to
a luncheon hosted by Draegerrsquos popular in-store
cooking school To learn more about becoming
an SEC member contact Sunny Porter CGA
at (916) 448-3545 n
New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER
Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes
Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom
Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo
2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916
The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals
CMYKFOCUS ON ALLERGENSTopical educational sessions and resources
June 5 - 7 | Houston
FOR MORE INFORMATION IDDBAORG 6083105000
REGISTER TODAYEXPANDED EXPO HOURS
NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths
SHOW amp SELL CENTERCAKE DECORATING CHALLENGE
MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH
JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain
CG
A N
EW
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AL
IFO
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CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in
March the second ldquotoolrdquo in its Grocery Compliance
Toolkit ndash this one focused on the Americans with
Disabilities Act
CGA contracted with the Sacramento-based law firm
of Downey Brand LLP to create a comprehensive
user-friendly ADA compliance guideline In addition
CGA hosted two regional seminars in conjunction
with the release of the ADA compliance ldquotoolrdquo In
addition the CGA Educational Foundation hosted a
one-hour webinar conducted by Downey Brand that
outlined the specifics of complying with the ADA
ldquoCalifornia grocers are increasingly seen as great
targets for opportunistic drive-by ADA public
access lawsuitsrdquo said CGA President Ron Fong
ldquoDespite recent changes to law serial plaintiffs
continue to send demand letters and file frivolous
lawsuits against grocers in an attempt to extract
monetary settlements We created this toolkit to
help retailers fend off these lawsuitsrdquo
The Grocery Compliance Toolkit was created as
a CGA member benefit to help grocery retailers
understand and manage the risks associated with
complying with state regulations related to the
grocery industry
The first ldquotoolrdquo was released last year and focused
on hazardous waste disposal
CGA members can download both the ADA and
hazardous waste disposal ldquotoolsrdquo from CGArsquos website
wwwcagrocerscom along with viewing both
seminars
CGA will release additional compliance ldquotoolsrdquo in the
coming months n
2014 2015
Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM
Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years
VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA
SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION
For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute
llaacutemenos o visite nuestra pagina de internet
Variety is the spice of lifeEnjoy it with our award winning
premium authentic line of cheeses
While that may hold true in the Lone Star State our
friends from Texas may be shocked to find that the
middle of the road in California is a relatively safe
place to be But finding safety on those center lines
wasnrsquot always so easy
Open primaries and the rise of the moderates
particularly on the Democratic side of the aisle have
widened that middle of the road from a dangerously
thin series of narrow yellow stripes to a ten-foot
wide median safe from most passing traffic
In a nation that divides its states into a red column
(for Republicans) and a blue column (for Democrats)
California exists solidly in the blue column with
Democrats holding every statewide office as well as
near supermajorities in both legislative houses
However a closer look reveals unexpected patches of
purple dotting the political map
Within these purple areas are a number of legislative
districts that reflect a uniquely Californian political
identity ndash a laissez faire attitude on social issues
mixed with a more conservative middle-of-the-road
view towards taxes and regulation
It was the voters in these areas the backers of
Proposition 14 had in mind back in 2010 when they
successfully pressed for passage of this initiative
to bring open primaries to California effectively
changing the game of legislative elections in our state
The rationale for passage was simple
In an overall political climate that often forced
candidates to the far-left and far-right during
primary elections in order to cater to the base to
win their partyrsquos nomination the general election
would often leave middle-of-the-road voters from
both parties (as well as independents) with no viable
candidates to support
GO
VE
RN
ME
NT
RE
LA
TIO
NS
Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD
BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo
In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses
Continued on p 18
Aaron Moreno Senior Director
Government Relations CGA
iStock
CA
LIF
OR
NIA
GR
OC
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17
If all candidates stood for primary election at the
same time with all voters choosing the top-two vote
getters for the general election regardless of party
open primary backers reasoned that candidates
would have to broaden their appeal to all voters in
a legislative district not to just the ldquotrue believersrdquo
who often decided primary elections The result
would be more moderate legislators be they
Democrat or Republican
This has been the case as
illustrated by the elections
of Republicans Catherine
Baker and David Hadley
in Assembly districts that
had elected Democrats in
previous election cycles Both
won due to their willingness
and ability to speak to voters from
both parties from the primary all the way
to the general election This would not have been
possible without open primaries
The open primary has not only changed the strategy
of candidates looking to enter the Legislature it
has also changed the way interest groups develop
strategies to elect legislators that best represent their
world views
Californiarsquos business interests have been particularly
savvy in adapting to these changes by adopting
strategies for supporting legislative candidates
that were once unheard of There was once a time
when it was automatic that these business interests
only backed Republican candidates This has
changed particularly in districts with a majority of
Democratic voters
In these districts it is not uncommon to see a
general election featuring two Democrats These
types of races provide a perfect synergy between
Democrats running from a more moderate position
and business interests who see a benefit from having
such political perspectives in the Legislature
This new breed of moderate Democrat would
have found it hard to advance out of a traditional
Democratic primary where the winner was decided
by the hard-core base
In the open primary system a moderate Democrat
can not only survive but thrive making it to the
general election by taking positions that appeal not
just to their fellow Democrats but to decline-to-state
and even moderate Republican voters
While remaining socially liberal like more
traditional Democrats moderates stand apart
by taking firm stances against new taxes and
unnecessary government regulation ndash two views
that align them with business interests
around the state
And the business community
has taken note spending
millions of dollars over the
past few years either in direct
donations to candidates
or the establishment of
political action committees
spending on behalf of
a candidate to elect more
moderate Democrats This has had
a big impact on the Legislature particularly in the
Assembly where the informal but highly influential
Moderate Caucus holds sway
Numbering anywhere from 10 to 15 depending on
who you ask and what is up for a vote on a particular
day this bloc of Democrats led by Assemblymembers
Rudy Salas from Bakersfield and Jim Cooper from
Sacramento have had considerable success helping
the business community in recent years by using
their influence to either water down legislation that
would adversely affect business preventing such
bills from being voted on by the full Assembly
or voting with Republicans to kill anti-business
legislation
Some notable business victories facilitated by the
Moderate Democrats during last yearrsquos legislative
DEM
REP
The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views
Continued from p 17
G O V E R N M E N T R E L AT I O N SCONTINUED
|
CA
LIF
OR
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OC
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18
CA
LIF
OR
NIA
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OC
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G O V E R N M E N T R E L AT I O N S
session were the defeat of legislation that would
have required a 50 percent reduction in petroleum
use in motor vehicles the preventing of legislation
increasing the minimum wage from being heard on
the Assembly Floor and the preventing of legislation
requiring predictive scheduling from also being
heard on the Assembly Floor among others
Business groups such as CGA and others have
benefitted from supporting the candidacies of
these Moderate Democrats While their support
is certainly not 100 percent even their support 50
to 60 percent of the time is enough to stave off the
seemingly never-ending onslaught of legislation that
has the potential to put a damper on the business
climate in California
Those percentages may not seem like much but
when you consider that without open primaries the
Democrats coming from these same Democratic
majority districts would often stand with business
20 percent of the time or less the value of Moderate
Democrats to business is high
So while the middle of the road in Texas may be
nothing more than road kill armadillos and yellow
stripes the medians in California are wide berths
that provide a cushion for business from forces that
donrsquot necessarily have their best interests in mind
We must all do our part to keep that cushion in
place The election of Moderate Democrats whenever
possible is a great way to do so n
Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto
Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats
July 27-28 2016
Register today at
wwwfresnofoodexpocom
For more information contact
Amy Fuentes at 559-227-9999
or infofresnofoodexpocom
Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much
more than just a trade show The Fresno Food Expo is a celebration of Central
Californiarsquos vibrant food community and a showcase of our regionrsquos most
innovative food and beverage producers
Whether you are sourcing for fresh product deli baked goods or beer and wine
the Fresno Food Expo is your opportunity to connect with local trendsetters and
CEOrsquos behind some of the nationrsquos largest food companies right in their backyard
Come sit at our table and join us for an experience
you wonrsquot find anywhere else
Discover the abundance of Central Californiarsquos Food Region
FREE Buyer Registration
raquo Grower amp Manufacturer Site Tours
raquo VIP Event amp Opening Reception
raquo Buyerrsquos Breakfast
raquo Business to Business Trade Show
Your registration includes access to the following events
FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo
C A P I T O L I N S I D E R
Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program
Californiarsquos Beverage Container Recycling
Program was created by legislation 30 years ago
At that time recycling was a new word and the
intent of the program was to change
consumer habit Glass and aluminum
containers were sold with a surcharge
which the consumer would receive
back if they returned the containers
In that day and age people
commonly purchased six-packs
of glass soda bottles from
their grocery store They were
encouraged to bring those
glass containers back to the
store and exchange them
for the next six-pack they
purchased The convenience
of bringing containers back to
the store was the impetus for
the convenience zones created
by the law
At that time curbside recycling
didnrsquot exist nor were there
any real markets for recycled
material
Over the years a lot has
changed in California
Our communities are different
The definition of convenience
has changed Industries reliant
on manufacturing with recycled
materials have been born and are
thriving Most important we have
changed the Californiarsquos throw away culture to
one focused on recycling and reuse
Yet Californiarsquos Bottle Bill has failed to keep up
with the times
Today the perfect storm is brewing
A number of California communities are revolting
against convenience zone recyclers placing fees
and others obstacles before them in an
effort to keep them away
These recyclers while generating the
majority of containers returned through
the program attract patrons that many
community leaders and grocery store
customers prefer not to see in the
parking lot of their local grocery
store
Petroleum prices have driven the
scrap price for plastic to a historic
low making recycled content more
expensive than virgin product
In addition the formula Cal Recycle
uses to determine the overall cost
of recycling has failed to accurately
capture recent increases in minimum
wage and other cost factors These
three elements combined have made
it nearly impossible for convenience
zone recyclers to remain in business
This is evident by the announcement
from RePlanet the Statersquos largest
convenience zone recycler in late
January to decertify 200 locations in
Northern California
The decertification of convenience
zones starts a process for Cal Recycle
First they are required to review the zones
where each site was located They can either
choose to exempt the zone from further service
or change the status of the zone from served to
unserved
LOUIE BROWN
Partner in the
Sacramento office
of Kahn Soares and
Conway LLP
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C A P I T O L I N S I D E R
The decision to change a zone to unserved triggers an
announcement by Cal Recycle to all dealers in the zone
that they have 30 days to decide to take containers back
in the store or pay the $100 per day ldquoin lieurdquo fee
Cal Recycle is evaluating the zones impacted by the
decertification of RePlanet Since the number of
exempted zones is capped by statute it is expected Cal
Recycle will be forced to change the status on a large
number of zones to unserved and likely impact hundreds
of dealers in northern California This process is expected
to take the next 90 to 120 days to complete
In the meantime CGA and others are developing a
legislative strategy to address these issues before grocers
are required to take action Your legislative team is
focused on a comprehensive solution that takes the
grocer out of the position of the recycler of last resort
along with a number of other changes to bring the
program into 2016 n
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Dog chow n at u r a l plus vitamins amp minerals
is made with real chicken There ARE no artificial colors
and Yoshiloves itloves itloves it
I makeNO ARTIFICIALCOLORS OR PRESERVATIVES
MADEWITH Real Chicken
ldquo
rdquoBARBARA JDog Chow ProductionDavenport IA
I makeCOLORS OR PRESERVATIVES
New
Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA
reg
P E R S P E C T I V E
Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business
There are several proposed ballot measures that
may be on the November statewide ballot that
would make significant changes to Californiarsquos
minimum wage and tax laws This article takes
a brief look at the four competing tax increase
measures as well as two competing minimum
wage measures
COMPETING TAX INCREASE INITIATIVES FOR
2016 BALLOT
There are four competing tax increase measures
on this yearrsquos ballot They include
n A proposal by the California Hospital
Association and SEIU-UHW that would expand
and make permanent income tax increases
on Californiarsquos highest earners but also allow
Prop 30rsquos sales tax increase to expire in 2016
as scheduled
n A plan by SEIU-UHW and the California
Teachers Association that would extend the
income tax increases under Prop 30 until
2030 and would let the sales tax increase
expire in 2016 as scheduled
n A third measure would impose a significant
surcharge on property valued over $3 million
n A fourth measure would increase the tax on
tobacco products by $2 per pack
ldquoThe School Funding and Budget Stability Act
of 2016rdquo No 15-0065
This measure would extend until 112031 the
personal income tax rates established by Prop
30 and dedicate the funds entirely to schools
without the ability of the Legislature to suspend
or withhold funds even in a state budget crisis
The measure also exempts these funds from
the Statersquos Rainy Day Fund established by voters
in 2014 by Prop 2 (requiring a portion of state
revenues be allocated to the state budget reserve
and to paying down debt)
In Section 3 of the measure the following
statements of purpose and intent are set forth
ldquo(a) The chief purpose of this measure is to
protect our schools by temporarily extending
current income tax rates on wealthy
Californians instead of awarding a huge tax
break to couples earning more than half a
million dollars a year or individuals earning
more than a quarter million Instead of
sending money back into the pockets of the
wealthy this measure sends the money to a
special account that must be spent exclusively
on schools
ldquo(b) This measure is intended to keep California
on a track toward balanced budgets and
reliable funding for schools and community
colleges preventing a new round of
devastating cuts to public education and a
return to the days of chronic budget deficits
and funding cuts
ldquo(c) This measure guarantees in the Constitution
that the revenues it raises for schools will
be sent directly to school districts and
community colleges for classroom expenses
not administrative costs This school funding
cannot be suspended or withheld no matter
what happens with the state budgetrdquo
ldquoThe Invest in Californiarsquos Children Actrdquo
No 15-0070
This measure would make permanent the Prop
30 personal income tax rates after 2019 plus add
additional higher rates for those earning above
$1 million per year (individuals) or $2 million
(married filing jointly) with the highest bracket
of 143 percent and earmark the funds for
CHRIS MICHEL I
Legislative Advocate
Aprea amp Micheli Inc
Continued on p 24
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23
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
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CA
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P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
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Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
CA
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WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
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copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
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Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
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Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
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copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
CA
LIF
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OC
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
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OR
NIA
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
OR
NIA
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OC
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
OR
NIA
GR
OC
ER
48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
LIF
OR
NIA
GR
OC
ER |
51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
OR
NIA
GR
OC
ER
52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
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IFO
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
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Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
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LIF
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Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
GR
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
F R O M T H E C H A I R
Growing People Growing GroceryCultivating the next generation of grocery leaders is a noble challenge worthy of our time energy and resources
The grocery business is an integral part of my
life I started working as a courtesy clerk at Bel
Air Market when I was 16 and joined Raleyrsquos
when the company was purchased in 1993
Sometimes the workplace was like a family
reunion for me ndash as many as 11 of my relatives
worked at Raleyrsquos or Bel Air at one point or
another Yoursquod probably describe my family as
having ldquogroceryrdquo in our blood
Irsquove stayed in the business because of the endless
doors of opportunity Prepared or perhaps
not I chose to walk through them and couldnrsquot
imagine working in any other industry Being in
the grocery business soon became my destiny
and I love what we do and who we serve
Of course working and growing the industry
isnrsquot limited to stocking products or managing
a department or supporting stores from the
corporate office We need produce buyers
growers farmers and manufacturers to provide
the food distributors and shippers to move it
from place to place and chefs to provide culinary
inspiration to create new in-store environments
for enjoying food
There are countless opportunities for young
people to join our industry and have a long
rewarding career but itrsquos up to us to find and
inspire them
How do we do that By connecting with young
people and providing resources to support them
in their pursuits
Letrsquos start by promoting STEM education ndash
Science Technology Engineering and Math ndash
for every student We need to fund scholarships
that make it easier for young people to advance
their learning
Our CGA Educational Foundation has supported
thousands of students in their educational
endeavors But most importantly by mentoring
the emerging stars in our communities and
sharing with them our success stories in the
grocery industry
CGA recently celebrated the careers of three
industry veterans Rob McDougall Donna
Tyndall and Bruce Wyatt at our annual Hall
of Achievement dinner They are outstanding
examples of leaders who have personally
invested their time talents and resources into
growing people who grow our companies and
our industry
Many companies in our great industry are
finding innovative ways to educate the industry
At Raleyrsquos wersquore reaching the next generation
through a program called ldquoWhere Your Food
Grows and Grazesrdquo which we developed
in cooperation with local ranchers and the
California Rangeland Trust
Students spend time on a ranch learning how
livestock are cared for and produce is grown and
then they tour one of our stores to find out more
about nutrition and our role in making fresh food
available to them Our goals are to inspire young
people to make good food choices and to share
our industryrsquos opportunities with them
Like farmers our job is to cultivate new talent
and watch it sprout The next generation of
leaders and innovators are out there waiting
for us to inspire them We can help this next
generation blossom grow and reap a harvest n
KEVIN KONKELCGA Chair of the Board
Senior Vice President Store Operations
Raleyrsquos Family of Fine Stores
|
CA
LIF
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Grocery Operations We Smooth lsquoem Out
Operational Eciency Greater Convenience More Money in Your Pocket
Cart Retrieval The industry leader in
shopping cart retrieval Reduce cart-loss expenses
and aggravation Detailed reporting from
an accountable partner
Because we understand the details of grocery operations we can save you money and aggravation dealing with things youd rather not have to Come to us to simplify your operations and save money
Cart Maintenance Reduce cart cleaning and
maintenance costs Lower new cart acquisition
expenses On-site quick return-to-action
convenience
Coupon Redemption Receive and reinvest manufacturer
reimbursement money faster Avoid costly chargebacks enjoy
one-stop convenience Zero upfront costs or counting
and sorting hassles
wwwcartretrievalnet1-800-252-4613
(818) 563-3031
CSCRC and CCRC are RMS companies ndash 1020 North Lake St Burbank CA 91502
FOLLOW US ON SOCIAL MEDIA
wwwcartretrievalnet
V I E W P O I N T
The Shopping Path of Least Resistance It isnrsquot quite the replicator technology fantasized about by ldquoStar Trekrdquo ndash with which one could just say ldquoEarly Grey Hotrdquo to a computer and it would magically appear ndash but that doesnrsquot mean it canrsquot ndash and wonrsquot ndash change the world
The fact is I think it has the potential to do both
Earlier this year we learned that Samsung
had unveiled a new refrigerator at the annual
Consumer Electronics Show (CES) in Las Vegas
But this wasnrsquot just a refrigerator It was a
ldquosmartrdquo refrigerator
Called the Family Hub Refrigerator this piece of
equipment comes with a 215-inch touchscreen
on one of its doors which people can use
to shop for products as they run low or out
Even more impressive the refrigerator also has
cameras inside that keep track of products as
they are removed so it can let people know
when supplies are running low And people
can access all this information from their smart
phones and use them to place orders
Wow Irsquom old enough to remember when
refrigerators didnrsquot even have automatic
defrosting (Young people reading this will have
to trust me on this We used to have to unplug
freezers and refrigerators and put pots of hot
water inside in order to defrost them It was a
total pain in the neck but a routine part of life
(Barbaric huh)
Samsung said that it has partnered with
MasterCard to provide payment services and
to start with MyWebGrocer FreshDirect and
ShopRite for online grocery ordering Needless
to say these platforms are thrilled
ldquoCommerce-enabled devices like the Family
Hub refrigerator represent an unprecedented
opportunity for our customers because it puts
them right where the consumer path to purchase
begins in the kitchenrdquo said Eric Healy president
of MyWebGrocer And Jodi Kahn FreshDirectrsquos
Chief Consumer Officer observed that it created
a ldquofrictionlessrdquo and ldquoseamlessrdquo road between
shopper and shop
Bingo
Not long after Samsung made its announcement
I got an email from Amazon promoting a new
item available on the site ndash a Brita water pitcher
that comes with a filter that enables the consumer
to have cleaner better-tasting water
Except that this was a pitcher with a curveball
ndash because this Brita pitcher is WiFi enabled
KEVIN COUPEFounder
MorningNewsBeatcom
Commerce-enabled devices like the Family Hub Refrigerator represent an unprecedented opportunity for our customers because it puts them right where the consumer path to purchasebegins in the kitchen
iStock
|
CA
LIF
OR
NIA
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V I E W P O I N T
It comes the email said ldquoequipped with a built-in
counter that tracks the amount of water that passes
through the pitcherrsquos filter The pitcher itself will
automatically order a new filter through Amazon Dash
Replenishment when the old filter nears its capacity
This new connected pitcher with Amazon Dash
Replenishment gives Brita owners exactly what they
want ndash a new Brita filter on their doorstep at the time
they need itrdquo
Pretty cool
(Irsquom tempted here to tell younger readers that I can
remember a time when we had to fetch water from
the well with a bucket and a rope but Irsquom not quite
that old)
The Brita Infinity Pitcher will cost about 45 bucks
which seems to be about a third more expensive than
most of the Brita pitchers that I found on Amazon
but the argument is that the tech-driven convenience
will make the price difference palatable And I have to
say that I think the argument is pretty compelling Or
to coin a phrase it is an argument that holds water
Innovations along these lines have been much
discussed over the years and it only was a matter of
time before dreams and reality met in such a way
that products like these could become mainstream
Without a doubt wersquore pretty much there products
like the Family Hub Refrigerator or Amazonrsquos
ecosystem-centric strategies (which are tied to the
Echo Subscribe-and-Save the Dash replenishment
system and even the delivery drones that probably
will be flying over our homes one of these days) are
putting us right in the middle of what could turn out
to be a pretty remarkable time And retailers have to
be prepared to embrace this revolution which almost
certainly will unfold faster than anyone expects
Interestingly Ford and Amazon announced at CES that
they are working on an initiative ldquogranting Ford owners
unprecedented access to their connected-home devices
from their cars and vice versardquo
And the Amazon ecosystem expands a little more
What is important to remember here is that once one
buys a refrigerator or a water pitcher it usually will be
quite some time before you have to replace them The
refrigerator only has value if it is filled with food that
you want to eat and the pitcher only has value if you
have the filters that create cleaner tastier water And
so it is critical for companies like Samsung and Brita
to find ways to be more relevant and useful which is
exactly what theyrsquove done
One of the things that traditional retailers have to
realize is that the advent of smart appliances and the
expanding ecosystems being created by some retailer
platforms ndash especially but not limited to Amazon ndash
are combining to create an environment in which it
is less and less necessary for people to actually go to
the store These progressive-minded companies are
creating paths of least resistance that provide few
reasons for consumers to detour elsewhere
Not everybody and not all the time But enough to
have an impact on a lot of bottom lines
One of the things that one finds a lot at food industry
conferences is people who like to cast doubt on the
e-revolution They like to talk about the people who
still want to go to the store about the hiccups that
can affect click-and-collect or delivery services about
how rural customers have different needs than urban
customers and about how selling points like ldquoyour
neighborhood grocerrdquo or ldquohometown proudrdquo or
ldquoold-fashioned servicerdquo or similar tropes are enough
for retailers to hang their hats on when competing in
this new environment
All of this may in fact be true And still not enough
to stave off the impact of technology especially on a
generation of shoppers that does not remember those
ancient pre-Amazon days
Not all people and not all the time But enough to
create leaks in the traditional market shares of a lot
of retailers and manufacturers Leaks that are likely to
grow bigger with time
The future is coming And it is traveling at Warp Eight n
One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution
CA
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OR
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IFO
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Grocers Converge on Sacramento
Grocery retailers and their supplier partners from
throughout California gathered in Sacramento in
late March to share business concerns with their
state representatives on key issues facing the
grocery industry
The face-to-face meetings with the majority of state
legislators highlighted the 2016 CGA Grocers Day
at the Capitol the Associationrsquos one-day member
advocacy event at the Statersquos Capitol
ldquoThis was a critical year for our members to
participate in CGArsquos premier member lobbying
activityrdquo said CGA President Ron Fong ldquoOur
members really stepped up and did a tremendous job
of sharing our story and providing valuable insight
into how our businesses operaterdquo
In addition to the face-to-face meetings attendees
heard from Gov Jerry Brown who addressed a
number of topics including the deal struck with labor
leaders over Easter weekend to introduce legislation
that will raise the statersquos minimum wage to $15
The governor said a deal needed to be struck as
an alternative to a minimum wage proposition
on the November ballot that would be even more
burdensome on Californiarsquos business community
The Governorrsquos remarks were met with skepticism
by the Association who later released a statement
chiding the governor for not including the business
community in its meeting with labor
ldquoOur members are dismayed at the events of the
past three daysrdquo Fong said in a written statement to
the media ldquoMajority Democrats and the Governor
(l to r) Jonathan Mayes Albertsons Kendra Doyel Ralphs Gov Jerry Brown Diana Godfrey Smart amp Final Ron Fong CGA
(l to r) Charla Giles Save Mart Supermarket Assemblymember Rudy Salas Michel LeClerc North State Grocery Inc Dave Madden MillerCoors
(l to r) Sen Richard Roth Mary Connelly Costco Eric Lindberg Jr Grocery Outlet Inc
CG
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IFO
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11
rammed a $5 increase in Californiarsquos minimum
wage through the entire legislative process in
just three days They did so without meaningful
conversation or an opportunity for businesses that
will bear the cost burden to weigh in on the issuerdquo
Attendees were also briefed by CGA staff on the key
issues they would discuss during their legislative
visits These topics included employee scheduling
wine coupons food bank donation tax credits and
the statersquos beleaguered beverage container recycling
program
Following an afternoon of legislative meetings
CGA hosted its annual Presidentrsquos Reception that
allowed Grocers Day attendees to meet again with
state legislators and staff but in a more relaxed
environment
CGA also hosted its popular Ice Cream Social
located this year inside the State Capitol and was
sponsored by Clover Stornetta Farms which provided
the ice cream n
The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day
Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc
Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc
Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final
Breakfast Kellogg Company Save Mart Supermarkets
Luncheon Jelly Belly Candy Co
Ice Cream Social Clover Stornetta Farms Inc
Presidentrsquos Reception Command Packaging MillerCoors
Legislative visits highlighted CGArsquos Grocers Day at the Capitol
Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social
Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA
CG
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Foundation Selects New Trustee ChairBrad Askeland Vice President
Holiday Markets has
been elected Chair of the
California Grocers Association
Educational Foundation
Board of Trustees Askeland
had previously served as
Foundation Vice Chair
Askeland succeeds former CGAEF Chair Jim Van
Gorkom NuCal Foods who served in that position
since 2011 Mark Johnson Unified Grocers Inc was
elected to replace Askeland as the Boardrsquos Vice Chair
Jacquie Slobom Gelsonrsquos Markets and Jerry Landers
Raleyrsquos will continue as the Foundationrsquos Secretary
and Treasurer respectively
ldquoWe look forward to Brad building on the programs
Jim was instrumental in fosteringrdquo said CGAEF
President Ron Fong
Askelandrsquos responsibilities will be to guide and direct
the CGAEF Board of Trustees The Foundation
was created in 1992 to advance Californiarsquos grocery
industry through employee education industry
research and recognition of excellence
Askeland who has served as a Trustee since 2009
began his grocery career in 1988 as a courtesy clerk
for a small independent market before joining
North State Grocery Inc in 1995 He managed
several stores before being named director of human
resources in 2003 n
SEC Store Tour Features Draegerrsquos MarketThe California
Grocers Associationrsquo
Supplier Executive
Council kicked off
its 2016 Store Tour
series in March at
Draegerrsquos Market in
San Mateo The tour
was led by Richard
Draeger chief
operations officer
for the company
The Draeger executive led the SEC members on an
aisle-by-aisle tour sharing his companyrsquos business
philosophy and strategy Draeger told attendees that
for his company itrsquos not about having the lowest
prices but ldquomaking things easier for the consumerrdquo
He added that shopping local is what makes
Draegerrsquos different
Following the tour SEC members were treated to
a luncheon hosted by Draegerrsquos popular in-store
cooking school To learn more about becoming
an SEC member contact Sunny Porter CGA
at (916) 448-3545 n
New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER
Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes
Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom
Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo
2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916
The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals
CMYKFOCUS ON ALLERGENSTopical educational sessions and resources
June 5 - 7 | Houston
FOR MORE INFORMATION IDDBAORG 6083105000
REGISTER TODAYEXPANDED EXPO HOURS
NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths
SHOW amp SELL CENTERCAKE DECORATING CHALLENGE
MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH
JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain
CG
A N
EW
S|
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IFO
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CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in
March the second ldquotoolrdquo in its Grocery Compliance
Toolkit ndash this one focused on the Americans with
Disabilities Act
CGA contracted with the Sacramento-based law firm
of Downey Brand LLP to create a comprehensive
user-friendly ADA compliance guideline In addition
CGA hosted two regional seminars in conjunction
with the release of the ADA compliance ldquotoolrdquo In
addition the CGA Educational Foundation hosted a
one-hour webinar conducted by Downey Brand that
outlined the specifics of complying with the ADA
ldquoCalifornia grocers are increasingly seen as great
targets for opportunistic drive-by ADA public
access lawsuitsrdquo said CGA President Ron Fong
ldquoDespite recent changes to law serial plaintiffs
continue to send demand letters and file frivolous
lawsuits against grocers in an attempt to extract
monetary settlements We created this toolkit to
help retailers fend off these lawsuitsrdquo
The Grocery Compliance Toolkit was created as
a CGA member benefit to help grocery retailers
understand and manage the risks associated with
complying with state regulations related to the
grocery industry
The first ldquotoolrdquo was released last year and focused
on hazardous waste disposal
CGA members can download both the ADA and
hazardous waste disposal ldquotoolsrdquo from CGArsquos website
wwwcagrocerscom along with viewing both
seminars
CGA will release additional compliance ldquotoolsrdquo in the
coming months n
2014 2015
Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM
Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years
VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA
SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION
For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute
llaacutemenos o visite nuestra pagina de internet
Variety is the spice of lifeEnjoy it with our award winning
premium authentic line of cheeses
While that may hold true in the Lone Star State our
friends from Texas may be shocked to find that the
middle of the road in California is a relatively safe
place to be But finding safety on those center lines
wasnrsquot always so easy
Open primaries and the rise of the moderates
particularly on the Democratic side of the aisle have
widened that middle of the road from a dangerously
thin series of narrow yellow stripes to a ten-foot
wide median safe from most passing traffic
In a nation that divides its states into a red column
(for Republicans) and a blue column (for Democrats)
California exists solidly in the blue column with
Democrats holding every statewide office as well as
near supermajorities in both legislative houses
However a closer look reveals unexpected patches of
purple dotting the political map
Within these purple areas are a number of legislative
districts that reflect a uniquely Californian political
identity ndash a laissez faire attitude on social issues
mixed with a more conservative middle-of-the-road
view towards taxes and regulation
It was the voters in these areas the backers of
Proposition 14 had in mind back in 2010 when they
successfully pressed for passage of this initiative
to bring open primaries to California effectively
changing the game of legislative elections in our state
The rationale for passage was simple
In an overall political climate that often forced
candidates to the far-left and far-right during
primary elections in order to cater to the base to
win their partyrsquos nomination the general election
would often leave middle-of-the-road voters from
both parties (as well as independents) with no viable
candidates to support
GO
VE
RN
ME
NT
RE
LA
TIO
NS
Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD
BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo
In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses
Continued on p 18
Aaron Moreno Senior Director
Government Relations CGA
iStock
CA
LIF
OR
NIA
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17
If all candidates stood for primary election at the
same time with all voters choosing the top-two vote
getters for the general election regardless of party
open primary backers reasoned that candidates
would have to broaden their appeal to all voters in
a legislative district not to just the ldquotrue believersrdquo
who often decided primary elections The result
would be more moderate legislators be they
Democrat or Republican
This has been the case as
illustrated by the elections
of Republicans Catherine
Baker and David Hadley
in Assembly districts that
had elected Democrats in
previous election cycles Both
won due to their willingness
and ability to speak to voters from
both parties from the primary all the way
to the general election This would not have been
possible without open primaries
The open primary has not only changed the strategy
of candidates looking to enter the Legislature it
has also changed the way interest groups develop
strategies to elect legislators that best represent their
world views
Californiarsquos business interests have been particularly
savvy in adapting to these changes by adopting
strategies for supporting legislative candidates
that were once unheard of There was once a time
when it was automatic that these business interests
only backed Republican candidates This has
changed particularly in districts with a majority of
Democratic voters
In these districts it is not uncommon to see a
general election featuring two Democrats These
types of races provide a perfect synergy between
Democrats running from a more moderate position
and business interests who see a benefit from having
such political perspectives in the Legislature
This new breed of moderate Democrat would
have found it hard to advance out of a traditional
Democratic primary where the winner was decided
by the hard-core base
In the open primary system a moderate Democrat
can not only survive but thrive making it to the
general election by taking positions that appeal not
just to their fellow Democrats but to decline-to-state
and even moderate Republican voters
While remaining socially liberal like more
traditional Democrats moderates stand apart
by taking firm stances against new taxes and
unnecessary government regulation ndash two views
that align them with business interests
around the state
And the business community
has taken note spending
millions of dollars over the
past few years either in direct
donations to candidates
or the establishment of
political action committees
spending on behalf of
a candidate to elect more
moderate Democrats This has had
a big impact on the Legislature particularly in the
Assembly where the informal but highly influential
Moderate Caucus holds sway
Numbering anywhere from 10 to 15 depending on
who you ask and what is up for a vote on a particular
day this bloc of Democrats led by Assemblymembers
Rudy Salas from Bakersfield and Jim Cooper from
Sacramento have had considerable success helping
the business community in recent years by using
their influence to either water down legislation that
would adversely affect business preventing such
bills from being voted on by the full Assembly
or voting with Republicans to kill anti-business
legislation
Some notable business victories facilitated by the
Moderate Democrats during last yearrsquos legislative
DEM
REP
The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views
Continued from p 17
G O V E R N M E N T R E L AT I O N SCONTINUED
|
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G O V E R N M E N T R E L AT I O N S
session were the defeat of legislation that would
have required a 50 percent reduction in petroleum
use in motor vehicles the preventing of legislation
increasing the minimum wage from being heard on
the Assembly Floor and the preventing of legislation
requiring predictive scheduling from also being
heard on the Assembly Floor among others
Business groups such as CGA and others have
benefitted from supporting the candidacies of
these Moderate Democrats While their support
is certainly not 100 percent even their support 50
to 60 percent of the time is enough to stave off the
seemingly never-ending onslaught of legislation that
has the potential to put a damper on the business
climate in California
Those percentages may not seem like much but
when you consider that without open primaries the
Democrats coming from these same Democratic
majority districts would often stand with business
20 percent of the time or less the value of Moderate
Democrats to business is high
So while the middle of the road in Texas may be
nothing more than road kill armadillos and yellow
stripes the medians in California are wide berths
that provide a cushion for business from forces that
donrsquot necessarily have their best interests in mind
We must all do our part to keep that cushion in
place The election of Moderate Democrats whenever
possible is a great way to do so n
Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto
Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats
July 27-28 2016
Register today at
wwwfresnofoodexpocom
For more information contact
Amy Fuentes at 559-227-9999
or infofresnofoodexpocom
Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much
more than just a trade show The Fresno Food Expo is a celebration of Central
Californiarsquos vibrant food community and a showcase of our regionrsquos most
innovative food and beverage producers
Whether you are sourcing for fresh product deli baked goods or beer and wine
the Fresno Food Expo is your opportunity to connect with local trendsetters and
CEOrsquos behind some of the nationrsquos largest food companies right in their backyard
Come sit at our table and join us for an experience
you wonrsquot find anywhere else
Discover the abundance of Central Californiarsquos Food Region
FREE Buyer Registration
raquo Grower amp Manufacturer Site Tours
raquo VIP Event amp Opening Reception
raquo Buyerrsquos Breakfast
raquo Business to Business Trade Show
Your registration includes access to the following events
FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo
C A P I T O L I N S I D E R
Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program
Californiarsquos Beverage Container Recycling
Program was created by legislation 30 years ago
At that time recycling was a new word and the
intent of the program was to change
consumer habit Glass and aluminum
containers were sold with a surcharge
which the consumer would receive
back if they returned the containers
In that day and age people
commonly purchased six-packs
of glass soda bottles from
their grocery store They were
encouraged to bring those
glass containers back to the
store and exchange them
for the next six-pack they
purchased The convenience
of bringing containers back to
the store was the impetus for
the convenience zones created
by the law
At that time curbside recycling
didnrsquot exist nor were there
any real markets for recycled
material
Over the years a lot has
changed in California
Our communities are different
The definition of convenience
has changed Industries reliant
on manufacturing with recycled
materials have been born and are
thriving Most important we have
changed the Californiarsquos throw away culture to
one focused on recycling and reuse
Yet Californiarsquos Bottle Bill has failed to keep up
with the times
Today the perfect storm is brewing
A number of California communities are revolting
against convenience zone recyclers placing fees
and others obstacles before them in an
effort to keep them away
These recyclers while generating the
majority of containers returned through
the program attract patrons that many
community leaders and grocery store
customers prefer not to see in the
parking lot of their local grocery
store
Petroleum prices have driven the
scrap price for plastic to a historic
low making recycled content more
expensive than virgin product
In addition the formula Cal Recycle
uses to determine the overall cost
of recycling has failed to accurately
capture recent increases in minimum
wage and other cost factors These
three elements combined have made
it nearly impossible for convenience
zone recyclers to remain in business
This is evident by the announcement
from RePlanet the Statersquos largest
convenience zone recycler in late
January to decertify 200 locations in
Northern California
The decertification of convenience
zones starts a process for Cal Recycle
First they are required to review the zones
where each site was located They can either
choose to exempt the zone from further service
or change the status of the zone from served to
unserved
LOUIE BROWN
Partner in the
Sacramento office
of Kahn Soares and
Conway LLP
iStock
|
CA
LIF
OR
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C A P I T O L I N S I D E R
The decision to change a zone to unserved triggers an
announcement by Cal Recycle to all dealers in the zone
that they have 30 days to decide to take containers back
in the store or pay the $100 per day ldquoin lieurdquo fee
Cal Recycle is evaluating the zones impacted by the
decertification of RePlanet Since the number of
exempted zones is capped by statute it is expected Cal
Recycle will be forced to change the status on a large
number of zones to unserved and likely impact hundreds
of dealers in northern California This process is expected
to take the next 90 to 120 days to complete
In the meantime CGA and others are developing a
legislative strategy to address these issues before grocers
are required to take action Your legislative team is
focused on a comprehensive solution that takes the
grocer out of the position of the recycler of last resort
along with a number of other changes to bring the
program into 2016 n
iStock
CA
LIF
OR
NIA
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OC
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21
Dog chow n at u r a l plus vitamins amp minerals
is made with real chicken There ARE no artificial colors
and Yoshiloves itloves itloves it
I makeNO ARTIFICIALCOLORS OR PRESERVATIVES
MADEWITH Real Chicken
ldquo
rdquoBARBARA JDog Chow ProductionDavenport IA
I makeCOLORS OR PRESERVATIVES
New
Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA
reg
P E R S P E C T I V E
Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business
There are several proposed ballot measures that
may be on the November statewide ballot that
would make significant changes to Californiarsquos
minimum wage and tax laws This article takes
a brief look at the four competing tax increase
measures as well as two competing minimum
wage measures
COMPETING TAX INCREASE INITIATIVES FOR
2016 BALLOT
There are four competing tax increase measures
on this yearrsquos ballot They include
n A proposal by the California Hospital
Association and SEIU-UHW that would expand
and make permanent income tax increases
on Californiarsquos highest earners but also allow
Prop 30rsquos sales tax increase to expire in 2016
as scheduled
n A plan by SEIU-UHW and the California
Teachers Association that would extend the
income tax increases under Prop 30 until
2030 and would let the sales tax increase
expire in 2016 as scheduled
n A third measure would impose a significant
surcharge on property valued over $3 million
n A fourth measure would increase the tax on
tobacco products by $2 per pack
ldquoThe School Funding and Budget Stability Act
of 2016rdquo No 15-0065
This measure would extend until 112031 the
personal income tax rates established by Prop
30 and dedicate the funds entirely to schools
without the ability of the Legislature to suspend
or withhold funds even in a state budget crisis
The measure also exempts these funds from
the Statersquos Rainy Day Fund established by voters
in 2014 by Prop 2 (requiring a portion of state
revenues be allocated to the state budget reserve
and to paying down debt)
In Section 3 of the measure the following
statements of purpose and intent are set forth
ldquo(a) The chief purpose of this measure is to
protect our schools by temporarily extending
current income tax rates on wealthy
Californians instead of awarding a huge tax
break to couples earning more than half a
million dollars a year or individuals earning
more than a quarter million Instead of
sending money back into the pockets of the
wealthy this measure sends the money to a
special account that must be spent exclusively
on schools
ldquo(b) This measure is intended to keep California
on a track toward balanced budgets and
reliable funding for schools and community
colleges preventing a new round of
devastating cuts to public education and a
return to the days of chronic budget deficits
and funding cuts
ldquo(c) This measure guarantees in the Constitution
that the revenues it raises for schools will
be sent directly to school districts and
community colleges for classroom expenses
not administrative costs This school funding
cannot be suspended or withheld no matter
what happens with the state budgetrdquo
ldquoThe Invest in Californiarsquos Children Actrdquo
No 15-0070
This measure would make permanent the Prop
30 personal income tax rates after 2019 plus add
additional higher rates for those earning above
$1 million per year (individuals) or $2 million
(married filing jointly) with the highest bracket
of 143 percent and earmark the funds for
CHRIS MICHEL I
Legislative Advocate
Aprea amp Micheli Inc
Continued on p 24
CA
LIF
OR
NIA
GR
OC
ER |
23
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
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24
P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
|
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26
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LIF
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OC
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27
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
CA
LIF
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
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29
WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
iStock
|
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30
copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
LUM
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33
Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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GR
OC
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
CA
LIF
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
NIA
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
OR
NIA
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OC
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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NIA
GR
OC
ER
48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
LIF
OR
NIA
GR
OC
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
OR
NIA
GR
OC
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
OR
NIA
GR
OC
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
RN
IA G
RO
CE
R |
55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
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LIF
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
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LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
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CA
LIF
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Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
OR
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
Grocery Operations We Smooth lsquoem Out
Operational Eciency Greater Convenience More Money in Your Pocket
Cart Retrieval The industry leader in
shopping cart retrieval Reduce cart-loss expenses
and aggravation Detailed reporting from
an accountable partner
Because we understand the details of grocery operations we can save you money and aggravation dealing with things youd rather not have to Come to us to simplify your operations and save money
Cart Maintenance Reduce cart cleaning and
maintenance costs Lower new cart acquisition
expenses On-site quick return-to-action
convenience
Coupon Redemption Receive and reinvest manufacturer
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one-stop convenience Zero upfront costs or counting
and sorting hassles
wwwcartretrievalnet1-800-252-4613
(818) 563-3031
CSCRC and CCRC are RMS companies ndash 1020 North Lake St Burbank CA 91502
FOLLOW US ON SOCIAL MEDIA
wwwcartretrievalnet
V I E W P O I N T
The Shopping Path of Least Resistance It isnrsquot quite the replicator technology fantasized about by ldquoStar Trekrdquo ndash with which one could just say ldquoEarly Grey Hotrdquo to a computer and it would magically appear ndash but that doesnrsquot mean it canrsquot ndash and wonrsquot ndash change the world
The fact is I think it has the potential to do both
Earlier this year we learned that Samsung
had unveiled a new refrigerator at the annual
Consumer Electronics Show (CES) in Las Vegas
But this wasnrsquot just a refrigerator It was a
ldquosmartrdquo refrigerator
Called the Family Hub Refrigerator this piece of
equipment comes with a 215-inch touchscreen
on one of its doors which people can use
to shop for products as they run low or out
Even more impressive the refrigerator also has
cameras inside that keep track of products as
they are removed so it can let people know
when supplies are running low And people
can access all this information from their smart
phones and use them to place orders
Wow Irsquom old enough to remember when
refrigerators didnrsquot even have automatic
defrosting (Young people reading this will have
to trust me on this We used to have to unplug
freezers and refrigerators and put pots of hot
water inside in order to defrost them It was a
total pain in the neck but a routine part of life
(Barbaric huh)
Samsung said that it has partnered with
MasterCard to provide payment services and
to start with MyWebGrocer FreshDirect and
ShopRite for online grocery ordering Needless
to say these platforms are thrilled
ldquoCommerce-enabled devices like the Family
Hub refrigerator represent an unprecedented
opportunity for our customers because it puts
them right where the consumer path to purchase
begins in the kitchenrdquo said Eric Healy president
of MyWebGrocer And Jodi Kahn FreshDirectrsquos
Chief Consumer Officer observed that it created
a ldquofrictionlessrdquo and ldquoseamlessrdquo road between
shopper and shop
Bingo
Not long after Samsung made its announcement
I got an email from Amazon promoting a new
item available on the site ndash a Brita water pitcher
that comes with a filter that enables the consumer
to have cleaner better-tasting water
Except that this was a pitcher with a curveball
ndash because this Brita pitcher is WiFi enabled
KEVIN COUPEFounder
MorningNewsBeatcom
Commerce-enabled devices like the Family Hub Refrigerator represent an unprecedented opportunity for our customers because it puts them right where the consumer path to purchasebegins in the kitchen
iStock
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V I E W P O I N T
It comes the email said ldquoequipped with a built-in
counter that tracks the amount of water that passes
through the pitcherrsquos filter The pitcher itself will
automatically order a new filter through Amazon Dash
Replenishment when the old filter nears its capacity
This new connected pitcher with Amazon Dash
Replenishment gives Brita owners exactly what they
want ndash a new Brita filter on their doorstep at the time
they need itrdquo
Pretty cool
(Irsquom tempted here to tell younger readers that I can
remember a time when we had to fetch water from
the well with a bucket and a rope but Irsquom not quite
that old)
The Brita Infinity Pitcher will cost about 45 bucks
which seems to be about a third more expensive than
most of the Brita pitchers that I found on Amazon
but the argument is that the tech-driven convenience
will make the price difference palatable And I have to
say that I think the argument is pretty compelling Or
to coin a phrase it is an argument that holds water
Innovations along these lines have been much
discussed over the years and it only was a matter of
time before dreams and reality met in such a way
that products like these could become mainstream
Without a doubt wersquore pretty much there products
like the Family Hub Refrigerator or Amazonrsquos
ecosystem-centric strategies (which are tied to the
Echo Subscribe-and-Save the Dash replenishment
system and even the delivery drones that probably
will be flying over our homes one of these days) are
putting us right in the middle of what could turn out
to be a pretty remarkable time And retailers have to
be prepared to embrace this revolution which almost
certainly will unfold faster than anyone expects
Interestingly Ford and Amazon announced at CES that
they are working on an initiative ldquogranting Ford owners
unprecedented access to their connected-home devices
from their cars and vice versardquo
And the Amazon ecosystem expands a little more
What is important to remember here is that once one
buys a refrigerator or a water pitcher it usually will be
quite some time before you have to replace them The
refrigerator only has value if it is filled with food that
you want to eat and the pitcher only has value if you
have the filters that create cleaner tastier water And
so it is critical for companies like Samsung and Brita
to find ways to be more relevant and useful which is
exactly what theyrsquove done
One of the things that traditional retailers have to
realize is that the advent of smart appliances and the
expanding ecosystems being created by some retailer
platforms ndash especially but not limited to Amazon ndash
are combining to create an environment in which it
is less and less necessary for people to actually go to
the store These progressive-minded companies are
creating paths of least resistance that provide few
reasons for consumers to detour elsewhere
Not everybody and not all the time But enough to
have an impact on a lot of bottom lines
One of the things that one finds a lot at food industry
conferences is people who like to cast doubt on the
e-revolution They like to talk about the people who
still want to go to the store about the hiccups that
can affect click-and-collect or delivery services about
how rural customers have different needs than urban
customers and about how selling points like ldquoyour
neighborhood grocerrdquo or ldquohometown proudrdquo or
ldquoold-fashioned servicerdquo or similar tropes are enough
for retailers to hang their hats on when competing in
this new environment
All of this may in fact be true And still not enough
to stave off the impact of technology especially on a
generation of shoppers that does not remember those
ancient pre-Amazon days
Not all people and not all the time But enough to
create leaks in the traditional market shares of a lot
of retailers and manufacturers Leaks that are likely to
grow bigger with time
The future is coming And it is traveling at Warp Eight n
One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution
CA
LIF
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Grocers Converge on Sacramento
Grocery retailers and their supplier partners from
throughout California gathered in Sacramento in
late March to share business concerns with their
state representatives on key issues facing the
grocery industry
The face-to-face meetings with the majority of state
legislators highlighted the 2016 CGA Grocers Day
at the Capitol the Associationrsquos one-day member
advocacy event at the Statersquos Capitol
ldquoThis was a critical year for our members to
participate in CGArsquos premier member lobbying
activityrdquo said CGA President Ron Fong ldquoOur
members really stepped up and did a tremendous job
of sharing our story and providing valuable insight
into how our businesses operaterdquo
In addition to the face-to-face meetings attendees
heard from Gov Jerry Brown who addressed a
number of topics including the deal struck with labor
leaders over Easter weekend to introduce legislation
that will raise the statersquos minimum wage to $15
The governor said a deal needed to be struck as
an alternative to a minimum wage proposition
on the November ballot that would be even more
burdensome on Californiarsquos business community
The Governorrsquos remarks were met with skepticism
by the Association who later released a statement
chiding the governor for not including the business
community in its meeting with labor
ldquoOur members are dismayed at the events of the
past three daysrdquo Fong said in a written statement to
the media ldquoMajority Democrats and the Governor
(l to r) Jonathan Mayes Albertsons Kendra Doyel Ralphs Gov Jerry Brown Diana Godfrey Smart amp Final Ron Fong CGA
(l to r) Charla Giles Save Mart Supermarket Assemblymember Rudy Salas Michel LeClerc North State Grocery Inc Dave Madden MillerCoors
(l to r) Sen Richard Roth Mary Connelly Costco Eric Lindberg Jr Grocery Outlet Inc
CG
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11
rammed a $5 increase in Californiarsquos minimum
wage through the entire legislative process in
just three days They did so without meaningful
conversation or an opportunity for businesses that
will bear the cost burden to weigh in on the issuerdquo
Attendees were also briefed by CGA staff on the key
issues they would discuss during their legislative
visits These topics included employee scheduling
wine coupons food bank donation tax credits and
the statersquos beleaguered beverage container recycling
program
Following an afternoon of legislative meetings
CGA hosted its annual Presidentrsquos Reception that
allowed Grocers Day attendees to meet again with
state legislators and staff but in a more relaxed
environment
CGA also hosted its popular Ice Cream Social
located this year inside the State Capitol and was
sponsored by Clover Stornetta Farms which provided
the ice cream n
The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day
Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc
Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc
Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final
Breakfast Kellogg Company Save Mart Supermarkets
Luncheon Jelly Belly Candy Co
Ice Cream Social Clover Stornetta Farms Inc
Presidentrsquos Reception Command Packaging MillerCoors
Legislative visits highlighted CGArsquos Grocers Day at the Capitol
Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social
Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA
CG
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Foundation Selects New Trustee ChairBrad Askeland Vice President
Holiday Markets has
been elected Chair of the
California Grocers Association
Educational Foundation
Board of Trustees Askeland
had previously served as
Foundation Vice Chair
Askeland succeeds former CGAEF Chair Jim Van
Gorkom NuCal Foods who served in that position
since 2011 Mark Johnson Unified Grocers Inc was
elected to replace Askeland as the Boardrsquos Vice Chair
Jacquie Slobom Gelsonrsquos Markets and Jerry Landers
Raleyrsquos will continue as the Foundationrsquos Secretary
and Treasurer respectively
ldquoWe look forward to Brad building on the programs
Jim was instrumental in fosteringrdquo said CGAEF
President Ron Fong
Askelandrsquos responsibilities will be to guide and direct
the CGAEF Board of Trustees The Foundation
was created in 1992 to advance Californiarsquos grocery
industry through employee education industry
research and recognition of excellence
Askeland who has served as a Trustee since 2009
began his grocery career in 1988 as a courtesy clerk
for a small independent market before joining
North State Grocery Inc in 1995 He managed
several stores before being named director of human
resources in 2003 n
SEC Store Tour Features Draegerrsquos MarketThe California
Grocers Associationrsquo
Supplier Executive
Council kicked off
its 2016 Store Tour
series in March at
Draegerrsquos Market in
San Mateo The tour
was led by Richard
Draeger chief
operations officer
for the company
The Draeger executive led the SEC members on an
aisle-by-aisle tour sharing his companyrsquos business
philosophy and strategy Draeger told attendees that
for his company itrsquos not about having the lowest
prices but ldquomaking things easier for the consumerrdquo
He added that shopping local is what makes
Draegerrsquos different
Following the tour SEC members were treated to
a luncheon hosted by Draegerrsquos popular in-store
cooking school To learn more about becoming
an SEC member contact Sunny Porter CGA
at (916) 448-3545 n
New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER
Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes
Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom
Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo
2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916
The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals
CMYKFOCUS ON ALLERGENSTopical educational sessions and resources
June 5 - 7 | Houston
FOR MORE INFORMATION IDDBAORG 6083105000
REGISTER TODAYEXPANDED EXPO HOURS
NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths
SHOW amp SELL CENTERCAKE DECORATING CHALLENGE
MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH
JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain
CG
A N
EW
S|
C
AL
IFO
RN
IA G
RO
CE
R
14
CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in
March the second ldquotoolrdquo in its Grocery Compliance
Toolkit ndash this one focused on the Americans with
Disabilities Act
CGA contracted with the Sacramento-based law firm
of Downey Brand LLP to create a comprehensive
user-friendly ADA compliance guideline In addition
CGA hosted two regional seminars in conjunction
with the release of the ADA compliance ldquotoolrdquo In
addition the CGA Educational Foundation hosted a
one-hour webinar conducted by Downey Brand that
outlined the specifics of complying with the ADA
ldquoCalifornia grocers are increasingly seen as great
targets for opportunistic drive-by ADA public
access lawsuitsrdquo said CGA President Ron Fong
ldquoDespite recent changes to law serial plaintiffs
continue to send demand letters and file frivolous
lawsuits against grocers in an attempt to extract
monetary settlements We created this toolkit to
help retailers fend off these lawsuitsrdquo
The Grocery Compliance Toolkit was created as
a CGA member benefit to help grocery retailers
understand and manage the risks associated with
complying with state regulations related to the
grocery industry
The first ldquotoolrdquo was released last year and focused
on hazardous waste disposal
CGA members can download both the ADA and
hazardous waste disposal ldquotoolsrdquo from CGArsquos website
wwwcagrocerscom along with viewing both
seminars
CGA will release additional compliance ldquotoolsrdquo in the
coming months n
2014 2015
Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM
Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years
VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA
SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION
For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute
llaacutemenos o visite nuestra pagina de internet
Variety is the spice of lifeEnjoy it with our award winning
premium authentic line of cheeses
While that may hold true in the Lone Star State our
friends from Texas may be shocked to find that the
middle of the road in California is a relatively safe
place to be But finding safety on those center lines
wasnrsquot always so easy
Open primaries and the rise of the moderates
particularly on the Democratic side of the aisle have
widened that middle of the road from a dangerously
thin series of narrow yellow stripes to a ten-foot
wide median safe from most passing traffic
In a nation that divides its states into a red column
(for Republicans) and a blue column (for Democrats)
California exists solidly in the blue column with
Democrats holding every statewide office as well as
near supermajorities in both legislative houses
However a closer look reveals unexpected patches of
purple dotting the political map
Within these purple areas are a number of legislative
districts that reflect a uniquely Californian political
identity ndash a laissez faire attitude on social issues
mixed with a more conservative middle-of-the-road
view towards taxes and regulation
It was the voters in these areas the backers of
Proposition 14 had in mind back in 2010 when they
successfully pressed for passage of this initiative
to bring open primaries to California effectively
changing the game of legislative elections in our state
The rationale for passage was simple
In an overall political climate that often forced
candidates to the far-left and far-right during
primary elections in order to cater to the base to
win their partyrsquos nomination the general election
would often leave middle-of-the-road voters from
both parties (as well as independents) with no viable
candidates to support
GO
VE
RN
ME
NT
RE
LA
TIO
NS
Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD
BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo
In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses
Continued on p 18
Aaron Moreno Senior Director
Government Relations CGA
iStock
CA
LIF
OR
NIA
GR
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17
If all candidates stood for primary election at the
same time with all voters choosing the top-two vote
getters for the general election regardless of party
open primary backers reasoned that candidates
would have to broaden their appeal to all voters in
a legislative district not to just the ldquotrue believersrdquo
who often decided primary elections The result
would be more moderate legislators be they
Democrat or Republican
This has been the case as
illustrated by the elections
of Republicans Catherine
Baker and David Hadley
in Assembly districts that
had elected Democrats in
previous election cycles Both
won due to their willingness
and ability to speak to voters from
both parties from the primary all the way
to the general election This would not have been
possible without open primaries
The open primary has not only changed the strategy
of candidates looking to enter the Legislature it
has also changed the way interest groups develop
strategies to elect legislators that best represent their
world views
Californiarsquos business interests have been particularly
savvy in adapting to these changes by adopting
strategies for supporting legislative candidates
that were once unheard of There was once a time
when it was automatic that these business interests
only backed Republican candidates This has
changed particularly in districts with a majority of
Democratic voters
In these districts it is not uncommon to see a
general election featuring two Democrats These
types of races provide a perfect synergy between
Democrats running from a more moderate position
and business interests who see a benefit from having
such political perspectives in the Legislature
This new breed of moderate Democrat would
have found it hard to advance out of a traditional
Democratic primary where the winner was decided
by the hard-core base
In the open primary system a moderate Democrat
can not only survive but thrive making it to the
general election by taking positions that appeal not
just to their fellow Democrats but to decline-to-state
and even moderate Republican voters
While remaining socially liberal like more
traditional Democrats moderates stand apart
by taking firm stances against new taxes and
unnecessary government regulation ndash two views
that align them with business interests
around the state
And the business community
has taken note spending
millions of dollars over the
past few years either in direct
donations to candidates
or the establishment of
political action committees
spending on behalf of
a candidate to elect more
moderate Democrats This has had
a big impact on the Legislature particularly in the
Assembly where the informal but highly influential
Moderate Caucus holds sway
Numbering anywhere from 10 to 15 depending on
who you ask and what is up for a vote on a particular
day this bloc of Democrats led by Assemblymembers
Rudy Salas from Bakersfield and Jim Cooper from
Sacramento have had considerable success helping
the business community in recent years by using
their influence to either water down legislation that
would adversely affect business preventing such
bills from being voted on by the full Assembly
or voting with Republicans to kill anti-business
legislation
Some notable business victories facilitated by the
Moderate Democrats during last yearrsquos legislative
DEM
REP
The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views
Continued from p 17
G O V E R N M E N T R E L AT I O N SCONTINUED
|
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OC
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18
CA
LIF
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19
G O V E R N M E N T R E L AT I O N S
session were the defeat of legislation that would
have required a 50 percent reduction in petroleum
use in motor vehicles the preventing of legislation
increasing the minimum wage from being heard on
the Assembly Floor and the preventing of legislation
requiring predictive scheduling from also being
heard on the Assembly Floor among others
Business groups such as CGA and others have
benefitted from supporting the candidacies of
these Moderate Democrats While their support
is certainly not 100 percent even their support 50
to 60 percent of the time is enough to stave off the
seemingly never-ending onslaught of legislation that
has the potential to put a damper on the business
climate in California
Those percentages may not seem like much but
when you consider that without open primaries the
Democrats coming from these same Democratic
majority districts would often stand with business
20 percent of the time or less the value of Moderate
Democrats to business is high
So while the middle of the road in Texas may be
nothing more than road kill armadillos and yellow
stripes the medians in California are wide berths
that provide a cushion for business from forces that
donrsquot necessarily have their best interests in mind
We must all do our part to keep that cushion in
place The election of Moderate Democrats whenever
possible is a great way to do so n
Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto
Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats
July 27-28 2016
Register today at
wwwfresnofoodexpocom
For more information contact
Amy Fuentes at 559-227-9999
or infofresnofoodexpocom
Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much
more than just a trade show The Fresno Food Expo is a celebration of Central
Californiarsquos vibrant food community and a showcase of our regionrsquos most
innovative food and beverage producers
Whether you are sourcing for fresh product deli baked goods or beer and wine
the Fresno Food Expo is your opportunity to connect with local trendsetters and
CEOrsquos behind some of the nationrsquos largest food companies right in their backyard
Come sit at our table and join us for an experience
you wonrsquot find anywhere else
Discover the abundance of Central Californiarsquos Food Region
FREE Buyer Registration
raquo Grower amp Manufacturer Site Tours
raquo VIP Event amp Opening Reception
raquo Buyerrsquos Breakfast
raquo Business to Business Trade Show
Your registration includes access to the following events
FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo
C A P I T O L I N S I D E R
Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program
Californiarsquos Beverage Container Recycling
Program was created by legislation 30 years ago
At that time recycling was a new word and the
intent of the program was to change
consumer habit Glass and aluminum
containers were sold with a surcharge
which the consumer would receive
back if they returned the containers
In that day and age people
commonly purchased six-packs
of glass soda bottles from
their grocery store They were
encouraged to bring those
glass containers back to the
store and exchange them
for the next six-pack they
purchased The convenience
of bringing containers back to
the store was the impetus for
the convenience zones created
by the law
At that time curbside recycling
didnrsquot exist nor were there
any real markets for recycled
material
Over the years a lot has
changed in California
Our communities are different
The definition of convenience
has changed Industries reliant
on manufacturing with recycled
materials have been born and are
thriving Most important we have
changed the Californiarsquos throw away culture to
one focused on recycling and reuse
Yet Californiarsquos Bottle Bill has failed to keep up
with the times
Today the perfect storm is brewing
A number of California communities are revolting
against convenience zone recyclers placing fees
and others obstacles before them in an
effort to keep them away
These recyclers while generating the
majority of containers returned through
the program attract patrons that many
community leaders and grocery store
customers prefer not to see in the
parking lot of their local grocery
store
Petroleum prices have driven the
scrap price for plastic to a historic
low making recycled content more
expensive than virgin product
In addition the formula Cal Recycle
uses to determine the overall cost
of recycling has failed to accurately
capture recent increases in minimum
wage and other cost factors These
three elements combined have made
it nearly impossible for convenience
zone recyclers to remain in business
This is evident by the announcement
from RePlanet the Statersquos largest
convenience zone recycler in late
January to decertify 200 locations in
Northern California
The decertification of convenience
zones starts a process for Cal Recycle
First they are required to review the zones
where each site was located They can either
choose to exempt the zone from further service
or change the status of the zone from served to
unserved
LOUIE BROWN
Partner in the
Sacramento office
of Kahn Soares and
Conway LLP
iStock
|
CA
LIF
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C A P I T O L I N S I D E R
The decision to change a zone to unserved triggers an
announcement by Cal Recycle to all dealers in the zone
that they have 30 days to decide to take containers back
in the store or pay the $100 per day ldquoin lieurdquo fee
Cal Recycle is evaluating the zones impacted by the
decertification of RePlanet Since the number of
exempted zones is capped by statute it is expected Cal
Recycle will be forced to change the status on a large
number of zones to unserved and likely impact hundreds
of dealers in northern California This process is expected
to take the next 90 to 120 days to complete
In the meantime CGA and others are developing a
legislative strategy to address these issues before grocers
are required to take action Your legislative team is
focused on a comprehensive solution that takes the
grocer out of the position of the recycler of last resort
along with a number of other changes to bring the
program into 2016 n
iStock
CA
LIF
OR
NIA
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OC
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21
Dog chow n at u r a l plus vitamins amp minerals
is made with real chicken There ARE no artificial colors
and Yoshiloves itloves itloves it
I makeNO ARTIFICIALCOLORS OR PRESERVATIVES
MADEWITH Real Chicken
ldquo
rdquoBARBARA JDog Chow ProductionDavenport IA
I makeCOLORS OR PRESERVATIVES
New
Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA
reg
P E R S P E C T I V E
Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business
There are several proposed ballot measures that
may be on the November statewide ballot that
would make significant changes to Californiarsquos
minimum wage and tax laws This article takes
a brief look at the four competing tax increase
measures as well as two competing minimum
wage measures
COMPETING TAX INCREASE INITIATIVES FOR
2016 BALLOT
There are four competing tax increase measures
on this yearrsquos ballot They include
n A proposal by the California Hospital
Association and SEIU-UHW that would expand
and make permanent income tax increases
on Californiarsquos highest earners but also allow
Prop 30rsquos sales tax increase to expire in 2016
as scheduled
n A plan by SEIU-UHW and the California
Teachers Association that would extend the
income tax increases under Prop 30 until
2030 and would let the sales tax increase
expire in 2016 as scheduled
n A third measure would impose a significant
surcharge on property valued over $3 million
n A fourth measure would increase the tax on
tobacco products by $2 per pack
ldquoThe School Funding and Budget Stability Act
of 2016rdquo No 15-0065
This measure would extend until 112031 the
personal income tax rates established by Prop
30 and dedicate the funds entirely to schools
without the ability of the Legislature to suspend
or withhold funds even in a state budget crisis
The measure also exempts these funds from
the Statersquos Rainy Day Fund established by voters
in 2014 by Prop 2 (requiring a portion of state
revenues be allocated to the state budget reserve
and to paying down debt)
In Section 3 of the measure the following
statements of purpose and intent are set forth
ldquo(a) The chief purpose of this measure is to
protect our schools by temporarily extending
current income tax rates on wealthy
Californians instead of awarding a huge tax
break to couples earning more than half a
million dollars a year or individuals earning
more than a quarter million Instead of
sending money back into the pockets of the
wealthy this measure sends the money to a
special account that must be spent exclusively
on schools
ldquo(b) This measure is intended to keep California
on a track toward balanced budgets and
reliable funding for schools and community
colleges preventing a new round of
devastating cuts to public education and a
return to the days of chronic budget deficits
and funding cuts
ldquo(c) This measure guarantees in the Constitution
that the revenues it raises for schools will
be sent directly to school districts and
community colleges for classroom expenses
not administrative costs This school funding
cannot be suspended or withheld no matter
what happens with the state budgetrdquo
ldquoThe Invest in Californiarsquos Children Actrdquo
No 15-0070
This measure would make permanent the Prop
30 personal income tax rates after 2019 plus add
additional higher rates for those earning above
$1 million per year (individuals) or $2 million
(married filing jointly) with the highest bracket
of 143 percent and earmark the funds for
CHRIS MICHEL I
Legislative Advocate
Aprea amp Micheli Inc
Continued on p 24
CA
LIF
OR
NIA
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OC
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23
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
|
CA
LIF
OR
NIA
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OC
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24
P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
|
CA
LIF
OR
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OC
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26
CA
LIF
OR
NIA
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OC
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27
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
CA
LIF
OR
NIA
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OC
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
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29
WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
iStock
|
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30
copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
LUM
INA
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RS
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LIF
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33
Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
|
CA
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
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LIF
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
LIF
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
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GR
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
RN
IA G
RO
CE
R |
55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
GR
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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
V I E W P O I N T
The Shopping Path of Least Resistance It isnrsquot quite the replicator technology fantasized about by ldquoStar Trekrdquo ndash with which one could just say ldquoEarly Grey Hotrdquo to a computer and it would magically appear ndash but that doesnrsquot mean it canrsquot ndash and wonrsquot ndash change the world
The fact is I think it has the potential to do both
Earlier this year we learned that Samsung
had unveiled a new refrigerator at the annual
Consumer Electronics Show (CES) in Las Vegas
But this wasnrsquot just a refrigerator It was a
ldquosmartrdquo refrigerator
Called the Family Hub Refrigerator this piece of
equipment comes with a 215-inch touchscreen
on one of its doors which people can use
to shop for products as they run low or out
Even more impressive the refrigerator also has
cameras inside that keep track of products as
they are removed so it can let people know
when supplies are running low And people
can access all this information from their smart
phones and use them to place orders
Wow Irsquom old enough to remember when
refrigerators didnrsquot even have automatic
defrosting (Young people reading this will have
to trust me on this We used to have to unplug
freezers and refrigerators and put pots of hot
water inside in order to defrost them It was a
total pain in the neck but a routine part of life
(Barbaric huh)
Samsung said that it has partnered with
MasterCard to provide payment services and
to start with MyWebGrocer FreshDirect and
ShopRite for online grocery ordering Needless
to say these platforms are thrilled
ldquoCommerce-enabled devices like the Family
Hub refrigerator represent an unprecedented
opportunity for our customers because it puts
them right where the consumer path to purchase
begins in the kitchenrdquo said Eric Healy president
of MyWebGrocer And Jodi Kahn FreshDirectrsquos
Chief Consumer Officer observed that it created
a ldquofrictionlessrdquo and ldquoseamlessrdquo road between
shopper and shop
Bingo
Not long after Samsung made its announcement
I got an email from Amazon promoting a new
item available on the site ndash a Brita water pitcher
that comes with a filter that enables the consumer
to have cleaner better-tasting water
Except that this was a pitcher with a curveball
ndash because this Brita pitcher is WiFi enabled
KEVIN COUPEFounder
MorningNewsBeatcom
Commerce-enabled devices like the Family Hub Refrigerator represent an unprecedented opportunity for our customers because it puts them right where the consumer path to purchasebegins in the kitchen
iStock
|
CA
LIF
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OC
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8
V I E W P O I N T
It comes the email said ldquoequipped with a built-in
counter that tracks the amount of water that passes
through the pitcherrsquos filter The pitcher itself will
automatically order a new filter through Amazon Dash
Replenishment when the old filter nears its capacity
This new connected pitcher with Amazon Dash
Replenishment gives Brita owners exactly what they
want ndash a new Brita filter on their doorstep at the time
they need itrdquo
Pretty cool
(Irsquom tempted here to tell younger readers that I can
remember a time when we had to fetch water from
the well with a bucket and a rope but Irsquom not quite
that old)
The Brita Infinity Pitcher will cost about 45 bucks
which seems to be about a third more expensive than
most of the Brita pitchers that I found on Amazon
but the argument is that the tech-driven convenience
will make the price difference palatable And I have to
say that I think the argument is pretty compelling Or
to coin a phrase it is an argument that holds water
Innovations along these lines have been much
discussed over the years and it only was a matter of
time before dreams and reality met in such a way
that products like these could become mainstream
Without a doubt wersquore pretty much there products
like the Family Hub Refrigerator or Amazonrsquos
ecosystem-centric strategies (which are tied to the
Echo Subscribe-and-Save the Dash replenishment
system and even the delivery drones that probably
will be flying over our homes one of these days) are
putting us right in the middle of what could turn out
to be a pretty remarkable time And retailers have to
be prepared to embrace this revolution which almost
certainly will unfold faster than anyone expects
Interestingly Ford and Amazon announced at CES that
they are working on an initiative ldquogranting Ford owners
unprecedented access to their connected-home devices
from their cars and vice versardquo
And the Amazon ecosystem expands a little more
What is important to remember here is that once one
buys a refrigerator or a water pitcher it usually will be
quite some time before you have to replace them The
refrigerator only has value if it is filled with food that
you want to eat and the pitcher only has value if you
have the filters that create cleaner tastier water And
so it is critical for companies like Samsung and Brita
to find ways to be more relevant and useful which is
exactly what theyrsquove done
One of the things that traditional retailers have to
realize is that the advent of smart appliances and the
expanding ecosystems being created by some retailer
platforms ndash especially but not limited to Amazon ndash
are combining to create an environment in which it
is less and less necessary for people to actually go to
the store These progressive-minded companies are
creating paths of least resistance that provide few
reasons for consumers to detour elsewhere
Not everybody and not all the time But enough to
have an impact on a lot of bottom lines
One of the things that one finds a lot at food industry
conferences is people who like to cast doubt on the
e-revolution They like to talk about the people who
still want to go to the store about the hiccups that
can affect click-and-collect or delivery services about
how rural customers have different needs than urban
customers and about how selling points like ldquoyour
neighborhood grocerrdquo or ldquohometown proudrdquo or
ldquoold-fashioned servicerdquo or similar tropes are enough
for retailers to hang their hats on when competing in
this new environment
All of this may in fact be true And still not enough
to stave off the impact of technology especially on a
generation of shoppers that does not remember those
ancient pre-Amazon days
Not all people and not all the time But enough to
create leaks in the traditional market shares of a lot
of retailers and manufacturers Leaks that are likely to
grow bigger with time
The future is coming And it is traveling at Warp Eight n
One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution
CA
LIF
OR
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9
CG
A N
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AL
IFO
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Grocers Converge on Sacramento
Grocery retailers and their supplier partners from
throughout California gathered in Sacramento in
late March to share business concerns with their
state representatives on key issues facing the
grocery industry
The face-to-face meetings with the majority of state
legislators highlighted the 2016 CGA Grocers Day
at the Capitol the Associationrsquos one-day member
advocacy event at the Statersquos Capitol
ldquoThis was a critical year for our members to
participate in CGArsquos premier member lobbying
activityrdquo said CGA President Ron Fong ldquoOur
members really stepped up and did a tremendous job
of sharing our story and providing valuable insight
into how our businesses operaterdquo
In addition to the face-to-face meetings attendees
heard from Gov Jerry Brown who addressed a
number of topics including the deal struck with labor
leaders over Easter weekend to introduce legislation
that will raise the statersquos minimum wage to $15
The governor said a deal needed to be struck as
an alternative to a minimum wage proposition
on the November ballot that would be even more
burdensome on Californiarsquos business community
The Governorrsquos remarks were met with skepticism
by the Association who later released a statement
chiding the governor for not including the business
community in its meeting with labor
ldquoOur members are dismayed at the events of the
past three daysrdquo Fong said in a written statement to
the media ldquoMajority Democrats and the Governor
(l to r) Jonathan Mayes Albertsons Kendra Doyel Ralphs Gov Jerry Brown Diana Godfrey Smart amp Final Ron Fong CGA
(l to r) Charla Giles Save Mart Supermarket Assemblymember Rudy Salas Michel LeClerc North State Grocery Inc Dave Madden MillerCoors
(l to r) Sen Richard Roth Mary Connelly Costco Eric Lindberg Jr Grocery Outlet Inc
CG
A N
EW
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IFO
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11
rammed a $5 increase in Californiarsquos minimum
wage through the entire legislative process in
just three days They did so without meaningful
conversation or an opportunity for businesses that
will bear the cost burden to weigh in on the issuerdquo
Attendees were also briefed by CGA staff on the key
issues they would discuss during their legislative
visits These topics included employee scheduling
wine coupons food bank donation tax credits and
the statersquos beleaguered beverage container recycling
program
Following an afternoon of legislative meetings
CGA hosted its annual Presidentrsquos Reception that
allowed Grocers Day attendees to meet again with
state legislators and staff but in a more relaxed
environment
CGA also hosted its popular Ice Cream Social
located this year inside the State Capitol and was
sponsored by Clover Stornetta Farms which provided
the ice cream n
The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day
Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc
Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc
Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final
Breakfast Kellogg Company Save Mart Supermarkets
Luncheon Jelly Belly Candy Co
Ice Cream Social Clover Stornetta Farms Inc
Presidentrsquos Reception Command Packaging MillerCoors
Legislative visits highlighted CGArsquos Grocers Day at the Capitol
Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social
Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA
CG
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IFO
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Foundation Selects New Trustee ChairBrad Askeland Vice President
Holiday Markets has
been elected Chair of the
California Grocers Association
Educational Foundation
Board of Trustees Askeland
had previously served as
Foundation Vice Chair
Askeland succeeds former CGAEF Chair Jim Van
Gorkom NuCal Foods who served in that position
since 2011 Mark Johnson Unified Grocers Inc was
elected to replace Askeland as the Boardrsquos Vice Chair
Jacquie Slobom Gelsonrsquos Markets and Jerry Landers
Raleyrsquos will continue as the Foundationrsquos Secretary
and Treasurer respectively
ldquoWe look forward to Brad building on the programs
Jim was instrumental in fosteringrdquo said CGAEF
President Ron Fong
Askelandrsquos responsibilities will be to guide and direct
the CGAEF Board of Trustees The Foundation
was created in 1992 to advance Californiarsquos grocery
industry through employee education industry
research and recognition of excellence
Askeland who has served as a Trustee since 2009
began his grocery career in 1988 as a courtesy clerk
for a small independent market before joining
North State Grocery Inc in 1995 He managed
several stores before being named director of human
resources in 2003 n
SEC Store Tour Features Draegerrsquos MarketThe California
Grocers Associationrsquo
Supplier Executive
Council kicked off
its 2016 Store Tour
series in March at
Draegerrsquos Market in
San Mateo The tour
was led by Richard
Draeger chief
operations officer
for the company
The Draeger executive led the SEC members on an
aisle-by-aisle tour sharing his companyrsquos business
philosophy and strategy Draeger told attendees that
for his company itrsquos not about having the lowest
prices but ldquomaking things easier for the consumerrdquo
He added that shopping local is what makes
Draegerrsquos different
Following the tour SEC members were treated to
a luncheon hosted by Draegerrsquos popular in-store
cooking school To learn more about becoming
an SEC member contact Sunny Porter CGA
at (916) 448-3545 n
New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER
Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes
Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom
Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo
2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916
The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals
CMYKFOCUS ON ALLERGENSTopical educational sessions and resources
June 5 - 7 | Houston
FOR MORE INFORMATION IDDBAORG 6083105000
REGISTER TODAYEXPANDED EXPO HOURS
NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths
SHOW amp SELL CENTERCAKE DECORATING CHALLENGE
MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH
JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain
CG
A N
EW
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AL
IFO
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CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in
March the second ldquotoolrdquo in its Grocery Compliance
Toolkit ndash this one focused on the Americans with
Disabilities Act
CGA contracted with the Sacramento-based law firm
of Downey Brand LLP to create a comprehensive
user-friendly ADA compliance guideline In addition
CGA hosted two regional seminars in conjunction
with the release of the ADA compliance ldquotoolrdquo In
addition the CGA Educational Foundation hosted a
one-hour webinar conducted by Downey Brand that
outlined the specifics of complying with the ADA
ldquoCalifornia grocers are increasingly seen as great
targets for opportunistic drive-by ADA public
access lawsuitsrdquo said CGA President Ron Fong
ldquoDespite recent changes to law serial plaintiffs
continue to send demand letters and file frivolous
lawsuits against grocers in an attempt to extract
monetary settlements We created this toolkit to
help retailers fend off these lawsuitsrdquo
The Grocery Compliance Toolkit was created as
a CGA member benefit to help grocery retailers
understand and manage the risks associated with
complying with state regulations related to the
grocery industry
The first ldquotoolrdquo was released last year and focused
on hazardous waste disposal
CGA members can download both the ADA and
hazardous waste disposal ldquotoolsrdquo from CGArsquos website
wwwcagrocerscom along with viewing both
seminars
CGA will release additional compliance ldquotoolsrdquo in the
coming months n
2014 2015
Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM
Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years
VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA
SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION
For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute
llaacutemenos o visite nuestra pagina de internet
Variety is the spice of lifeEnjoy it with our award winning
premium authentic line of cheeses
While that may hold true in the Lone Star State our
friends from Texas may be shocked to find that the
middle of the road in California is a relatively safe
place to be But finding safety on those center lines
wasnrsquot always so easy
Open primaries and the rise of the moderates
particularly on the Democratic side of the aisle have
widened that middle of the road from a dangerously
thin series of narrow yellow stripes to a ten-foot
wide median safe from most passing traffic
In a nation that divides its states into a red column
(for Republicans) and a blue column (for Democrats)
California exists solidly in the blue column with
Democrats holding every statewide office as well as
near supermajorities in both legislative houses
However a closer look reveals unexpected patches of
purple dotting the political map
Within these purple areas are a number of legislative
districts that reflect a uniquely Californian political
identity ndash a laissez faire attitude on social issues
mixed with a more conservative middle-of-the-road
view towards taxes and regulation
It was the voters in these areas the backers of
Proposition 14 had in mind back in 2010 when they
successfully pressed for passage of this initiative
to bring open primaries to California effectively
changing the game of legislative elections in our state
The rationale for passage was simple
In an overall political climate that often forced
candidates to the far-left and far-right during
primary elections in order to cater to the base to
win their partyrsquos nomination the general election
would often leave middle-of-the-road voters from
both parties (as well as independents) with no viable
candidates to support
GO
VE
RN
ME
NT
RE
LA
TIO
NS
Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD
BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo
In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses
Continued on p 18
Aaron Moreno Senior Director
Government Relations CGA
iStock
CA
LIF
OR
NIA
GR
OC
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17
If all candidates stood for primary election at the
same time with all voters choosing the top-two vote
getters for the general election regardless of party
open primary backers reasoned that candidates
would have to broaden their appeal to all voters in
a legislative district not to just the ldquotrue believersrdquo
who often decided primary elections The result
would be more moderate legislators be they
Democrat or Republican
This has been the case as
illustrated by the elections
of Republicans Catherine
Baker and David Hadley
in Assembly districts that
had elected Democrats in
previous election cycles Both
won due to their willingness
and ability to speak to voters from
both parties from the primary all the way
to the general election This would not have been
possible without open primaries
The open primary has not only changed the strategy
of candidates looking to enter the Legislature it
has also changed the way interest groups develop
strategies to elect legislators that best represent their
world views
Californiarsquos business interests have been particularly
savvy in adapting to these changes by adopting
strategies for supporting legislative candidates
that were once unheard of There was once a time
when it was automatic that these business interests
only backed Republican candidates This has
changed particularly in districts with a majority of
Democratic voters
In these districts it is not uncommon to see a
general election featuring two Democrats These
types of races provide a perfect synergy between
Democrats running from a more moderate position
and business interests who see a benefit from having
such political perspectives in the Legislature
This new breed of moderate Democrat would
have found it hard to advance out of a traditional
Democratic primary where the winner was decided
by the hard-core base
In the open primary system a moderate Democrat
can not only survive but thrive making it to the
general election by taking positions that appeal not
just to their fellow Democrats but to decline-to-state
and even moderate Republican voters
While remaining socially liberal like more
traditional Democrats moderates stand apart
by taking firm stances against new taxes and
unnecessary government regulation ndash two views
that align them with business interests
around the state
And the business community
has taken note spending
millions of dollars over the
past few years either in direct
donations to candidates
or the establishment of
political action committees
spending on behalf of
a candidate to elect more
moderate Democrats This has had
a big impact on the Legislature particularly in the
Assembly where the informal but highly influential
Moderate Caucus holds sway
Numbering anywhere from 10 to 15 depending on
who you ask and what is up for a vote on a particular
day this bloc of Democrats led by Assemblymembers
Rudy Salas from Bakersfield and Jim Cooper from
Sacramento have had considerable success helping
the business community in recent years by using
their influence to either water down legislation that
would adversely affect business preventing such
bills from being voted on by the full Assembly
or voting with Republicans to kill anti-business
legislation
Some notable business victories facilitated by the
Moderate Democrats during last yearrsquos legislative
DEM
REP
The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views
Continued from p 17
G O V E R N M E N T R E L AT I O N SCONTINUED
|
CA
LIF
OR
NIA
GR
OC
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18
CA
LIF
OR
NIA
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OC
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19
G O V E R N M E N T R E L AT I O N S
session were the defeat of legislation that would
have required a 50 percent reduction in petroleum
use in motor vehicles the preventing of legislation
increasing the minimum wage from being heard on
the Assembly Floor and the preventing of legislation
requiring predictive scheduling from also being
heard on the Assembly Floor among others
Business groups such as CGA and others have
benefitted from supporting the candidacies of
these Moderate Democrats While their support
is certainly not 100 percent even their support 50
to 60 percent of the time is enough to stave off the
seemingly never-ending onslaught of legislation that
has the potential to put a damper on the business
climate in California
Those percentages may not seem like much but
when you consider that without open primaries the
Democrats coming from these same Democratic
majority districts would often stand with business
20 percent of the time or less the value of Moderate
Democrats to business is high
So while the middle of the road in Texas may be
nothing more than road kill armadillos and yellow
stripes the medians in California are wide berths
that provide a cushion for business from forces that
donrsquot necessarily have their best interests in mind
We must all do our part to keep that cushion in
place The election of Moderate Democrats whenever
possible is a great way to do so n
Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto
Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats
July 27-28 2016
Register today at
wwwfresnofoodexpocom
For more information contact
Amy Fuentes at 559-227-9999
or infofresnofoodexpocom
Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much
more than just a trade show The Fresno Food Expo is a celebration of Central
Californiarsquos vibrant food community and a showcase of our regionrsquos most
innovative food and beverage producers
Whether you are sourcing for fresh product deli baked goods or beer and wine
the Fresno Food Expo is your opportunity to connect with local trendsetters and
CEOrsquos behind some of the nationrsquos largest food companies right in their backyard
Come sit at our table and join us for an experience
you wonrsquot find anywhere else
Discover the abundance of Central Californiarsquos Food Region
FREE Buyer Registration
raquo Grower amp Manufacturer Site Tours
raquo VIP Event amp Opening Reception
raquo Buyerrsquos Breakfast
raquo Business to Business Trade Show
Your registration includes access to the following events
FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo
C A P I T O L I N S I D E R
Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program
Californiarsquos Beverage Container Recycling
Program was created by legislation 30 years ago
At that time recycling was a new word and the
intent of the program was to change
consumer habit Glass and aluminum
containers were sold with a surcharge
which the consumer would receive
back if they returned the containers
In that day and age people
commonly purchased six-packs
of glass soda bottles from
their grocery store They were
encouraged to bring those
glass containers back to the
store and exchange them
for the next six-pack they
purchased The convenience
of bringing containers back to
the store was the impetus for
the convenience zones created
by the law
At that time curbside recycling
didnrsquot exist nor were there
any real markets for recycled
material
Over the years a lot has
changed in California
Our communities are different
The definition of convenience
has changed Industries reliant
on manufacturing with recycled
materials have been born and are
thriving Most important we have
changed the Californiarsquos throw away culture to
one focused on recycling and reuse
Yet Californiarsquos Bottle Bill has failed to keep up
with the times
Today the perfect storm is brewing
A number of California communities are revolting
against convenience zone recyclers placing fees
and others obstacles before them in an
effort to keep them away
These recyclers while generating the
majority of containers returned through
the program attract patrons that many
community leaders and grocery store
customers prefer not to see in the
parking lot of their local grocery
store
Petroleum prices have driven the
scrap price for plastic to a historic
low making recycled content more
expensive than virgin product
In addition the formula Cal Recycle
uses to determine the overall cost
of recycling has failed to accurately
capture recent increases in minimum
wage and other cost factors These
three elements combined have made
it nearly impossible for convenience
zone recyclers to remain in business
This is evident by the announcement
from RePlanet the Statersquos largest
convenience zone recycler in late
January to decertify 200 locations in
Northern California
The decertification of convenience
zones starts a process for Cal Recycle
First they are required to review the zones
where each site was located They can either
choose to exempt the zone from further service
or change the status of the zone from served to
unserved
LOUIE BROWN
Partner in the
Sacramento office
of Kahn Soares and
Conway LLP
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C A P I T O L I N S I D E R
The decision to change a zone to unserved triggers an
announcement by Cal Recycle to all dealers in the zone
that they have 30 days to decide to take containers back
in the store or pay the $100 per day ldquoin lieurdquo fee
Cal Recycle is evaluating the zones impacted by the
decertification of RePlanet Since the number of
exempted zones is capped by statute it is expected Cal
Recycle will be forced to change the status on a large
number of zones to unserved and likely impact hundreds
of dealers in northern California This process is expected
to take the next 90 to 120 days to complete
In the meantime CGA and others are developing a
legislative strategy to address these issues before grocers
are required to take action Your legislative team is
focused on a comprehensive solution that takes the
grocer out of the position of the recycler of last resort
along with a number of other changes to bring the
program into 2016 n
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21
Dog chow n at u r a l plus vitamins amp minerals
is made with real chicken There ARE no artificial colors
and Yoshiloves itloves itloves it
I makeNO ARTIFICIALCOLORS OR PRESERVATIVES
MADEWITH Real Chicken
ldquo
rdquoBARBARA JDog Chow ProductionDavenport IA
I makeCOLORS OR PRESERVATIVES
New
Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA
reg
P E R S P E C T I V E
Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business
There are several proposed ballot measures that
may be on the November statewide ballot that
would make significant changes to Californiarsquos
minimum wage and tax laws This article takes
a brief look at the four competing tax increase
measures as well as two competing minimum
wage measures
COMPETING TAX INCREASE INITIATIVES FOR
2016 BALLOT
There are four competing tax increase measures
on this yearrsquos ballot They include
n A proposal by the California Hospital
Association and SEIU-UHW that would expand
and make permanent income tax increases
on Californiarsquos highest earners but also allow
Prop 30rsquos sales tax increase to expire in 2016
as scheduled
n A plan by SEIU-UHW and the California
Teachers Association that would extend the
income tax increases under Prop 30 until
2030 and would let the sales tax increase
expire in 2016 as scheduled
n A third measure would impose a significant
surcharge on property valued over $3 million
n A fourth measure would increase the tax on
tobacco products by $2 per pack
ldquoThe School Funding and Budget Stability Act
of 2016rdquo No 15-0065
This measure would extend until 112031 the
personal income tax rates established by Prop
30 and dedicate the funds entirely to schools
without the ability of the Legislature to suspend
or withhold funds even in a state budget crisis
The measure also exempts these funds from
the Statersquos Rainy Day Fund established by voters
in 2014 by Prop 2 (requiring a portion of state
revenues be allocated to the state budget reserve
and to paying down debt)
In Section 3 of the measure the following
statements of purpose and intent are set forth
ldquo(a) The chief purpose of this measure is to
protect our schools by temporarily extending
current income tax rates on wealthy
Californians instead of awarding a huge tax
break to couples earning more than half a
million dollars a year or individuals earning
more than a quarter million Instead of
sending money back into the pockets of the
wealthy this measure sends the money to a
special account that must be spent exclusively
on schools
ldquo(b) This measure is intended to keep California
on a track toward balanced budgets and
reliable funding for schools and community
colleges preventing a new round of
devastating cuts to public education and a
return to the days of chronic budget deficits
and funding cuts
ldquo(c) This measure guarantees in the Constitution
that the revenues it raises for schools will
be sent directly to school districts and
community colleges for classroom expenses
not administrative costs This school funding
cannot be suspended or withheld no matter
what happens with the state budgetrdquo
ldquoThe Invest in Californiarsquos Children Actrdquo
No 15-0070
This measure would make permanent the Prop
30 personal income tax rates after 2019 plus add
additional higher rates for those earning above
$1 million per year (individuals) or $2 million
(married filing jointly) with the highest bracket
of 143 percent and earmark the funds for
CHRIS MICHEL I
Legislative Advocate
Aprea amp Micheli Inc
Continued on p 24
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23
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
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24
P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
|
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Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
CA
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WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
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copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
LUM
INA
TO
RS
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Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
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CA
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
OR
NIA
GR
OC
ER |
37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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OC
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
CA
LIF
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NIA
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OC
ER
40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
CA
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
LIF
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NIA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
NIA
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OC
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
OR
NIA
GR
OC
ER |
47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
OR
NIA
GR
OC
ER
48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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NIA
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
GR
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
V I E W P O I N T
It comes the email said ldquoequipped with a built-in
counter that tracks the amount of water that passes
through the pitcherrsquos filter The pitcher itself will
automatically order a new filter through Amazon Dash
Replenishment when the old filter nears its capacity
This new connected pitcher with Amazon Dash
Replenishment gives Brita owners exactly what they
want ndash a new Brita filter on their doorstep at the time
they need itrdquo
Pretty cool
(Irsquom tempted here to tell younger readers that I can
remember a time when we had to fetch water from
the well with a bucket and a rope but Irsquom not quite
that old)
The Brita Infinity Pitcher will cost about 45 bucks
which seems to be about a third more expensive than
most of the Brita pitchers that I found on Amazon
but the argument is that the tech-driven convenience
will make the price difference palatable And I have to
say that I think the argument is pretty compelling Or
to coin a phrase it is an argument that holds water
Innovations along these lines have been much
discussed over the years and it only was a matter of
time before dreams and reality met in such a way
that products like these could become mainstream
Without a doubt wersquore pretty much there products
like the Family Hub Refrigerator or Amazonrsquos
ecosystem-centric strategies (which are tied to the
Echo Subscribe-and-Save the Dash replenishment
system and even the delivery drones that probably
will be flying over our homes one of these days) are
putting us right in the middle of what could turn out
to be a pretty remarkable time And retailers have to
be prepared to embrace this revolution which almost
certainly will unfold faster than anyone expects
Interestingly Ford and Amazon announced at CES that
they are working on an initiative ldquogranting Ford owners
unprecedented access to their connected-home devices
from their cars and vice versardquo
And the Amazon ecosystem expands a little more
What is important to remember here is that once one
buys a refrigerator or a water pitcher it usually will be
quite some time before you have to replace them The
refrigerator only has value if it is filled with food that
you want to eat and the pitcher only has value if you
have the filters that create cleaner tastier water And
so it is critical for companies like Samsung and Brita
to find ways to be more relevant and useful which is
exactly what theyrsquove done
One of the things that traditional retailers have to
realize is that the advent of smart appliances and the
expanding ecosystems being created by some retailer
platforms ndash especially but not limited to Amazon ndash
are combining to create an environment in which it
is less and less necessary for people to actually go to
the store These progressive-minded companies are
creating paths of least resistance that provide few
reasons for consumers to detour elsewhere
Not everybody and not all the time But enough to
have an impact on a lot of bottom lines
One of the things that one finds a lot at food industry
conferences is people who like to cast doubt on the
e-revolution They like to talk about the people who
still want to go to the store about the hiccups that
can affect click-and-collect or delivery services about
how rural customers have different needs than urban
customers and about how selling points like ldquoyour
neighborhood grocerrdquo or ldquohometown proudrdquo or
ldquoold-fashioned servicerdquo or similar tropes are enough
for retailers to hang their hats on when competing in
this new environment
All of this may in fact be true And still not enough
to stave off the impact of technology especially on a
generation of shoppers that does not remember those
ancient pre-Amazon days
Not all people and not all the time But enough to
create leaks in the traditional market shares of a lot
of retailers and manufacturers Leaks that are likely to
grow bigger with time
The future is coming And it is traveling at Warp Eight n
One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution
CA
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OR
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IFO
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Grocers Converge on Sacramento
Grocery retailers and their supplier partners from
throughout California gathered in Sacramento in
late March to share business concerns with their
state representatives on key issues facing the
grocery industry
The face-to-face meetings with the majority of state
legislators highlighted the 2016 CGA Grocers Day
at the Capitol the Associationrsquos one-day member
advocacy event at the Statersquos Capitol
ldquoThis was a critical year for our members to
participate in CGArsquos premier member lobbying
activityrdquo said CGA President Ron Fong ldquoOur
members really stepped up and did a tremendous job
of sharing our story and providing valuable insight
into how our businesses operaterdquo
In addition to the face-to-face meetings attendees
heard from Gov Jerry Brown who addressed a
number of topics including the deal struck with labor
leaders over Easter weekend to introduce legislation
that will raise the statersquos minimum wage to $15
The governor said a deal needed to be struck as
an alternative to a minimum wage proposition
on the November ballot that would be even more
burdensome on Californiarsquos business community
The Governorrsquos remarks were met with skepticism
by the Association who later released a statement
chiding the governor for not including the business
community in its meeting with labor
ldquoOur members are dismayed at the events of the
past three daysrdquo Fong said in a written statement to
the media ldquoMajority Democrats and the Governor
(l to r) Jonathan Mayes Albertsons Kendra Doyel Ralphs Gov Jerry Brown Diana Godfrey Smart amp Final Ron Fong CGA
(l to r) Charla Giles Save Mart Supermarket Assemblymember Rudy Salas Michel LeClerc North State Grocery Inc Dave Madden MillerCoors
(l to r) Sen Richard Roth Mary Connelly Costco Eric Lindberg Jr Grocery Outlet Inc
CG
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IFO
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11
rammed a $5 increase in Californiarsquos minimum
wage through the entire legislative process in
just three days They did so without meaningful
conversation or an opportunity for businesses that
will bear the cost burden to weigh in on the issuerdquo
Attendees were also briefed by CGA staff on the key
issues they would discuss during their legislative
visits These topics included employee scheduling
wine coupons food bank donation tax credits and
the statersquos beleaguered beverage container recycling
program
Following an afternoon of legislative meetings
CGA hosted its annual Presidentrsquos Reception that
allowed Grocers Day attendees to meet again with
state legislators and staff but in a more relaxed
environment
CGA also hosted its popular Ice Cream Social
located this year inside the State Capitol and was
sponsored by Clover Stornetta Farms which provided
the ice cream n
The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day
Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc
Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc
Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final
Breakfast Kellogg Company Save Mart Supermarkets
Luncheon Jelly Belly Candy Co
Ice Cream Social Clover Stornetta Farms Inc
Presidentrsquos Reception Command Packaging MillerCoors
Legislative visits highlighted CGArsquos Grocers Day at the Capitol
Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social
Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA
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Foundation Selects New Trustee ChairBrad Askeland Vice President
Holiday Markets has
been elected Chair of the
California Grocers Association
Educational Foundation
Board of Trustees Askeland
had previously served as
Foundation Vice Chair
Askeland succeeds former CGAEF Chair Jim Van
Gorkom NuCal Foods who served in that position
since 2011 Mark Johnson Unified Grocers Inc was
elected to replace Askeland as the Boardrsquos Vice Chair
Jacquie Slobom Gelsonrsquos Markets and Jerry Landers
Raleyrsquos will continue as the Foundationrsquos Secretary
and Treasurer respectively
ldquoWe look forward to Brad building on the programs
Jim was instrumental in fosteringrdquo said CGAEF
President Ron Fong
Askelandrsquos responsibilities will be to guide and direct
the CGAEF Board of Trustees The Foundation
was created in 1992 to advance Californiarsquos grocery
industry through employee education industry
research and recognition of excellence
Askeland who has served as a Trustee since 2009
began his grocery career in 1988 as a courtesy clerk
for a small independent market before joining
North State Grocery Inc in 1995 He managed
several stores before being named director of human
resources in 2003 n
SEC Store Tour Features Draegerrsquos MarketThe California
Grocers Associationrsquo
Supplier Executive
Council kicked off
its 2016 Store Tour
series in March at
Draegerrsquos Market in
San Mateo The tour
was led by Richard
Draeger chief
operations officer
for the company
The Draeger executive led the SEC members on an
aisle-by-aisle tour sharing his companyrsquos business
philosophy and strategy Draeger told attendees that
for his company itrsquos not about having the lowest
prices but ldquomaking things easier for the consumerrdquo
He added that shopping local is what makes
Draegerrsquos different
Following the tour SEC members were treated to
a luncheon hosted by Draegerrsquos popular in-store
cooking school To learn more about becoming
an SEC member contact Sunny Porter CGA
at (916) 448-3545 n
New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER
Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes
Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom
Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo
2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916
The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals
CMYKFOCUS ON ALLERGENSTopical educational sessions and resources
June 5 - 7 | Houston
FOR MORE INFORMATION IDDBAORG 6083105000
REGISTER TODAYEXPANDED EXPO HOURS
NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths
SHOW amp SELL CENTERCAKE DECORATING CHALLENGE
MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH
JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain
CG
A N
EW
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IFO
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CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in
March the second ldquotoolrdquo in its Grocery Compliance
Toolkit ndash this one focused on the Americans with
Disabilities Act
CGA contracted with the Sacramento-based law firm
of Downey Brand LLP to create a comprehensive
user-friendly ADA compliance guideline In addition
CGA hosted two regional seminars in conjunction
with the release of the ADA compliance ldquotoolrdquo In
addition the CGA Educational Foundation hosted a
one-hour webinar conducted by Downey Brand that
outlined the specifics of complying with the ADA
ldquoCalifornia grocers are increasingly seen as great
targets for opportunistic drive-by ADA public
access lawsuitsrdquo said CGA President Ron Fong
ldquoDespite recent changes to law serial plaintiffs
continue to send demand letters and file frivolous
lawsuits against grocers in an attempt to extract
monetary settlements We created this toolkit to
help retailers fend off these lawsuitsrdquo
The Grocery Compliance Toolkit was created as
a CGA member benefit to help grocery retailers
understand and manage the risks associated with
complying with state regulations related to the
grocery industry
The first ldquotoolrdquo was released last year and focused
on hazardous waste disposal
CGA members can download both the ADA and
hazardous waste disposal ldquotoolsrdquo from CGArsquos website
wwwcagrocerscom along with viewing both
seminars
CGA will release additional compliance ldquotoolsrdquo in the
coming months n
2014 2015
Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM
Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years
VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA
SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION
For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute
llaacutemenos o visite nuestra pagina de internet
Variety is the spice of lifeEnjoy it with our award winning
premium authentic line of cheeses
While that may hold true in the Lone Star State our
friends from Texas may be shocked to find that the
middle of the road in California is a relatively safe
place to be But finding safety on those center lines
wasnrsquot always so easy
Open primaries and the rise of the moderates
particularly on the Democratic side of the aisle have
widened that middle of the road from a dangerously
thin series of narrow yellow stripes to a ten-foot
wide median safe from most passing traffic
In a nation that divides its states into a red column
(for Republicans) and a blue column (for Democrats)
California exists solidly in the blue column with
Democrats holding every statewide office as well as
near supermajorities in both legislative houses
However a closer look reveals unexpected patches of
purple dotting the political map
Within these purple areas are a number of legislative
districts that reflect a uniquely Californian political
identity ndash a laissez faire attitude on social issues
mixed with a more conservative middle-of-the-road
view towards taxes and regulation
It was the voters in these areas the backers of
Proposition 14 had in mind back in 2010 when they
successfully pressed for passage of this initiative
to bring open primaries to California effectively
changing the game of legislative elections in our state
The rationale for passage was simple
In an overall political climate that often forced
candidates to the far-left and far-right during
primary elections in order to cater to the base to
win their partyrsquos nomination the general election
would often leave middle-of-the-road voters from
both parties (as well as independents) with no viable
candidates to support
GO
VE
RN
ME
NT
RE
LA
TIO
NS
Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD
BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo
In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses
Continued on p 18
Aaron Moreno Senior Director
Government Relations CGA
iStock
CA
LIF
OR
NIA
GR
OC
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17
If all candidates stood for primary election at the
same time with all voters choosing the top-two vote
getters for the general election regardless of party
open primary backers reasoned that candidates
would have to broaden their appeal to all voters in
a legislative district not to just the ldquotrue believersrdquo
who often decided primary elections The result
would be more moderate legislators be they
Democrat or Republican
This has been the case as
illustrated by the elections
of Republicans Catherine
Baker and David Hadley
in Assembly districts that
had elected Democrats in
previous election cycles Both
won due to their willingness
and ability to speak to voters from
both parties from the primary all the way
to the general election This would not have been
possible without open primaries
The open primary has not only changed the strategy
of candidates looking to enter the Legislature it
has also changed the way interest groups develop
strategies to elect legislators that best represent their
world views
Californiarsquos business interests have been particularly
savvy in adapting to these changes by adopting
strategies for supporting legislative candidates
that were once unheard of There was once a time
when it was automatic that these business interests
only backed Republican candidates This has
changed particularly in districts with a majority of
Democratic voters
In these districts it is not uncommon to see a
general election featuring two Democrats These
types of races provide a perfect synergy between
Democrats running from a more moderate position
and business interests who see a benefit from having
such political perspectives in the Legislature
This new breed of moderate Democrat would
have found it hard to advance out of a traditional
Democratic primary where the winner was decided
by the hard-core base
In the open primary system a moderate Democrat
can not only survive but thrive making it to the
general election by taking positions that appeal not
just to their fellow Democrats but to decline-to-state
and even moderate Republican voters
While remaining socially liberal like more
traditional Democrats moderates stand apart
by taking firm stances against new taxes and
unnecessary government regulation ndash two views
that align them with business interests
around the state
And the business community
has taken note spending
millions of dollars over the
past few years either in direct
donations to candidates
or the establishment of
political action committees
spending on behalf of
a candidate to elect more
moderate Democrats This has had
a big impact on the Legislature particularly in the
Assembly where the informal but highly influential
Moderate Caucus holds sway
Numbering anywhere from 10 to 15 depending on
who you ask and what is up for a vote on a particular
day this bloc of Democrats led by Assemblymembers
Rudy Salas from Bakersfield and Jim Cooper from
Sacramento have had considerable success helping
the business community in recent years by using
their influence to either water down legislation that
would adversely affect business preventing such
bills from being voted on by the full Assembly
or voting with Republicans to kill anti-business
legislation
Some notable business victories facilitated by the
Moderate Democrats during last yearrsquos legislative
DEM
REP
The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views
Continued from p 17
G O V E R N M E N T R E L AT I O N SCONTINUED
|
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OR
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CA
LIF
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G O V E R N M E N T R E L AT I O N S
session were the defeat of legislation that would
have required a 50 percent reduction in petroleum
use in motor vehicles the preventing of legislation
increasing the minimum wage from being heard on
the Assembly Floor and the preventing of legislation
requiring predictive scheduling from also being
heard on the Assembly Floor among others
Business groups such as CGA and others have
benefitted from supporting the candidacies of
these Moderate Democrats While their support
is certainly not 100 percent even their support 50
to 60 percent of the time is enough to stave off the
seemingly never-ending onslaught of legislation that
has the potential to put a damper on the business
climate in California
Those percentages may not seem like much but
when you consider that without open primaries the
Democrats coming from these same Democratic
majority districts would often stand with business
20 percent of the time or less the value of Moderate
Democrats to business is high
So while the middle of the road in Texas may be
nothing more than road kill armadillos and yellow
stripes the medians in California are wide berths
that provide a cushion for business from forces that
donrsquot necessarily have their best interests in mind
We must all do our part to keep that cushion in
place The election of Moderate Democrats whenever
possible is a great way to do so n
Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto
Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats
July 27-28 2016
Register today at
wwwfresnofoodexpocom
For more information contact
Amy Fuentes at 559-227-9999
or infofresnofoodexpocom
Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much
more than just a trade show The Fresno Food Expo is a celebration of Central
Californiarsquos vibrant food community and a showcase of our regionrsquos most
innovative food and beverage producers
Whether you are sourcing for fresh product deli baked goods or beer and wine
the Fresno Food Expo is your opportunity to connect with local trendsetters and
CEOrsquos behind some of the nationrsquos largest food companies right in their backyard
Come sit at our table and join us for an experience
you wonrsquot find anywhere else
Discover the abundance of Central Californiarsquos Food Region
FREE Buyer Registration
raquo Grower amp Manufacturer Site Tours
raquo VIP Event amp Opening Reception
raquo Buyerrsquos Breakfast
raquo Business to Business Trade Show
Your registration includes access to the following events
FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo
C A P I T O L I N S I D E R
Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program
Californiarsquos Beverage Container Recycling
Program was created by legislation 30 years ago
At that time recycling was a new word and the
intent of the program was to change
consumer habit Glass and aluminum
containers were sold with a surcharge
which the consumer would receive
back if they returned the containers
In that day and age people
commonly purchased six-packs
of glass soda bottles from
their grocery store They were
encouraged to bring those
glass containers back to the
store and exchange them
for the next six-pack they
purchased The convenience
of bringing containers back to
the store was the impetus for
the convenience zones created
by the law
At that time curbside recycling
didnrsquot exist nor were there
any real markets for recycled
material
Over the years a lot has
changed in California
Our communities are different
The definition of convenience
has changed Industries reliant
on manufacturing with recycled
materials have been born and are
thriving Most important we have
changed the Californiarsquos throw away culture to
one focused on recycling and reuse
Yet Californiarsquos Bottle Bill has failed to keep up
with the times
Today the perfect storm is brewing
A number of California communities are revolting
against convenience zone recyclers placing fees
and others obstacles before them in an
effort to keep them away
These recyclers while generating the
majority of containers returned through
the program attract patrons that many
community leaders and grocery store
customers prefer not to see in the
parking lot of their local grocery
store
Petroleum prices have driven the
scrap price for plastic to a historic
low making recycled content more
expensive than virgin product
In addition the formula Cal Recycle
uses to determine the overall cost
of recycling has failed to accurately
capture recent increases in minimum
wage and other cost factors These
three elements combined have made
it nearly impossible for convenience
zone recyclers to remain in business
This is evident by the announcement
from RePlanet the Statersquos largest
convenience zone recycler in late
January to decertify 200 locations in
Northern California
The decertification of convenience
zones starts a process for Cal Recycle
First they are required to review the zones
where each site was located They can either
choose to exempt the zone from further service
or change the status of the zone from served to
unserved
LOUIE BROWN
Partner in the
Sacramento office
of Kahn Soares and
Conway LLP
iStock
|
CA
LIF
OR
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OC
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20
C A P I T O L I N S I D E R
The decision to change a zone to unserved triggers an
announcement by Cal Recycle to all dealers in the zone
that they have 30 days to decide to take containers back
in the store or pay the $100 per day ldquoin lieurdquo fee
Cal Recycle is evaluating the zones impacted by the
decertification of RePlanet Since the number of
exempted zones is capped by statute it is expected Cal
Recycle will be forced to change the status on a large
number of zones to unserved and likely impact hundreds
of dealers in northern California This process is expected
to take the next 90 to 120 days to complete
In the meantime CGA and others are developing a
legislative strategy to address these issues before grocers
are required to take action Your legislative team is
focused on a comprehensive solution that takes the
grocer out of the position of the recycler of last resort
along with a number of other changes to bring the
program into 2016 n
iStock
CA
LIF
OR
NIA
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OC
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21
Dog chow n at u r a l plus vitamins amp minerals
is made with real chicken There ARE no artificial colors
and Yoshiloves itloves itloves it
I makeNO ARTIFICIALCOLORS OR PRESERVATIVES
MADEWITH Real Chicken
ldquo
rdquoBARBARA JDog Chow ProductionDavenport IA
I makeCOLORS OR PRESERVATIVES
New
Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA
reg
P E R S P E C T I V E
Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business
There are several proposed ballot measures that
may be on the November statewide ballot that
would make significant changes to Californiarsquos
minimum wage and tax laws This article takes
a brief look at the four competing tax increase
measures as well as two competing minimum
wage measures
COMPETING TAX INCREASE INITIATIVES FOR
2016 BALLOT
There are four competing tax increase measures
on this yearrsquos ballot They include
n A proposal by the California Hospital
Association and SEIU-UHW that would expand
and make permanent income tax increases
on Californiarsquos highest earners but also allow
Prop 30rsquos sales tax increase to expire in 2016
as scheduled
n A plan by SEIU-UHW and the California
Teachers Association that would extend the
income tax increases under Prop 30 until
2030 and would let the sales tax increase
expire in 2016 as scheduled
n A third measure would impose a significant
surcharge on property valued over $3 million
n A fourth measure would increase the tax on
tobacco products by $2 per pack
ldquoThe School Funding and Budget Stability Act
of 2016rdquo No 15-0065
This measure would extend until 112031 the
personal income tax rates established by Prop
30 and dedicate the funds entirely to schools
without the ability of the Legislature to suspend
or withhold funds even in a state budget crisis
The measure also exempts these funds from
the Statersquos Rainy Day Fund established by voters
in 2014 by Prop 2 (requiring a portion of state
revenues be allocated to the state budget reserve
and to paying down debt)
In Section 3 of the measure the following
statements of purpose and intent are set forth
ldquo(a) The chief purpose of this measure is to
protect our schools by temporarily extending
current income tax rates on wealthy
Californians instead of awarding a huge tax
break to couples earning more than half a
million dollars a year or individuals earning
more than a quarter million Instead of
sending money back into the pockets of the
wealthy this measure sends the money to a
special account that must be spent exclusively
on schools
ldquo(b) This measure is intended to keep California
on a track toward balanced budgets and
reliable funding for schools and community
colleges preventing a new round of
devastating cuts to public education and a
return to the days of chronic budget deficits
and funding cuts
ldquo(c) This measure guarantees in the Constitution
that the revenues it raises for schools will
be sent directly to school districts and
community colleges for classroom expenses
not administrative costs This school funding
cannot be suspended or withheld no matter
what happens with the state budgetrdquo
ldquoThe Invest in Californiarsquos Children Actrdquo
No 15-0070
This measure would make permanent the Prop
30 personal income tax rates after 2019 plus add
additional higher rates for those earning above
$1 million per year (individuals) or $2 million
(married filing jointly) with the highest bracket
of 143 percent and earmark the funds for
CHRIS MICHEL I
Legislative Advocate
Aprea amp Micheli Inc
Continued on p 24
CA
LIF
OR
NIA
GR
OC
ER |
23
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
|
CA
LIF
OR
NIA
GR
OC
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24
P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
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26
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27
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
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LIF
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
CA
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29
WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
iStock
|
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copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
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33
Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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GR
OC
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
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LIF
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
CA
LIF
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
OR
NIA
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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NIA
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
RN
IA G
RO
CE
R |
55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
OR
NIA
GR
OC
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
OR
NIA
GR
OC
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
OR
NIA
GR
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
GR
OC
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
CG
A N
EW
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C
AL
IFO
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Grocers Converge on Sacramento
Grocery retailers and their supplier partners from
throughout California gathered in Sacramento in
late March to share business concerns with their
state representatives on key issues facing the
grocery industry
The face-to-face meetings with the majority of state
legislators highlighted the 2016 CGA Grocers Day
at the Capitol the Associationrsquos one-day member
advocacy event at the Statersquos Capitol
ldquoThis was a critical year for our members to
participate in CGArsquos premier member lobbying
activityrdquo said CGA President Ron Fong ldquoOur
members really stepped up and did a tremendous job
of sharing our story and providing valuable insight
into how our businesses operaterdquo
In addition to the face-to-face meetings attendees
heard from Gov Jerry Brown who addressed a
number of topics including the deal struck with labor
leaders over Easter weekend to introduce legislation
that will raise the statersquos minimum wage to $15
The governor said a deal needed to be struck as
an alternative to a minimum wage proposition
on the November ballot that would be even more
burdensome on Californiarsquos business community
The Governorrsquos remarks were met with skepticism
by the Association who later released a statement
chiding the governor for not including the business
community in its meeting with labor
ldquoOur members are dismayed at the events of the
past three daysrdquo Fong said in a written statement to
the media ldquoMajority Democrats and the Governor
(l to r) Jonathan Mayes Albertsons Kendra Doyel Ralphs Gov Jerry Brown Diana Godfrey Smart amp Final Ron Fong CGA
(l to r) Charla Giles Save Mart Supermarket Assemblymember Rudy Salas Michel LeClerc North State Grocery Inc Dave Madden MillerCoors
(l to r) Sen Richard Roth Mary Connelly Costco Eric Lindberg Jr Grocery Outlet Inc
CG
A N
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AL
IFO
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IA G
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11
rammed a $5 increase in Californiarsquos minimum
wage through the entire legislative process in
just three days They did so without meaningful
conversation or an opportunity for businesses that
will bear the cost burden to weigh in on the issuerdquo
Attendees were also briefed by CGA staff on the key
issues they would discuss during their legislative
visits These topics included employee scheduling
wine coupons food bank donation tax credits and
the statersquos beleaguered beverage container recycling
program
Following an afternoon of legislative meetings
CGA hosted its annual Presidentrsquos Reception that
allowed Grocers Day attendees to meet again with
state legislators and staff but in a more relaxed
environment
CGA also hosted its popular Ice Cream Social
located this year inside the State Capitol and was
sponsored by Clover Stornetta Farms which provided
the ice cream n
The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day
Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc
Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc
Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final
Breakfast Kellogg Company Save Mart Supermarkets
Luncheon Jelly Belly Candy Co
Ice Cream Social Clover Stornetta Farms Inc
Presidentrsquos Reception Command Packaging MillerCoors
Legislative visits highlighted CGArsquos Grocers Day at the Capitol
Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social
Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA
CG
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IFO
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Foundation Selects New Trustee ChairBrad Askeland Vice President
Holiday Markets has
been elected Chair of the
California Grocers Association
Educational Foundation
Board of Trustees Askeland
had previously served as
Foundation Vice Chair
Askeland succeeds former CGAEF Chair Jim Van
Gorkom NuCal Foods who served in that position
since 2011 Mark Johnson Unified Grocers Inc was
elected to replace Askeland as the Boardrsquos Vice Chair
Jacquie Slobom Gelsonrsquos Markets and Jerry Landers
Raleyrsquos will continue as the Foundationrsquos Secretary
and Treasurer respectively
ldquoWe look forward to Brad building on the programs
Jim was instrumental in fosteringrdquo said CGAEF
President Ron Fong
Askelandrsquos responsibilities will be to guide and direct
the CGAEF Board of Trustees The Foundation
was created in 1992 to advance Californiarsquos grocery
industry through employee education industry
research and recognition of excellence
Askeland who has served as a Trustee since 2009
began his grocery career in 1988 as a courtesy clerk
for a small independent market before joining
North State Grocery Inc in 1995 He managed
several stores before being named director of human
resources in 2003 n
SEC Store Tour Features Draegerrsquos MarketThe California
Grocers Associationrsquo
Supplier Executive
Council kicked off
its 2016 Store Tour
series in March at
Draegerrsquos Market in
San Mateo The tour
was led by Richard
Draeger chief
operations officer
for the company
The Draeger executive led the SEC members on an
aisle-by-aisle tour sharing his companyrsquos business
philosophy and strategy Draeger told attendees that
for his company itrsquos not about having the lowest
prices but ldquomaking things easier for the consumerrdquo
He added that shopping local is what makes
Draegerrsquos different
Following the tour SEC members were treated to
a luncheon hosted by Draegerrsquos popular in-store
cooking school To learn more about becoming
an SEC member contact Sunny Porter CGA
at (916) 448-3545 n
New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER
Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes
Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom
Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo
2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916
The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals
CMYKFOCUS ON ALLERGENSTopical educational sessions and resources
June 5 - 7 | Houston
FOR MORE INFORMATION IDDBAORG 6083105000
REGISTER TODAYEXPANDED EXPO HOURS
NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths
SHOW amp SELL CENTERCAKE DECORATING CHALLENGE
MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH
JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain
CG
A N
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CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in
March the second ldquotoolrdquo in its Grocery Compliance
Toolkit ndash this one focused on the Americans with
Disabilities Act
CGA contracted with the Sacramento-based law firm
of Downey Brand LLP to create a comprehensive
user-friendly ADA compliance guideline In addition
CGA hosted two regional seminars in conjunction
with the release of the ADA compliance ldquotoolrdquo In
addition the CGA Educational Foundation hosted a
one-hour webinar conducted by Downey Brand that
outlined the specifics of complying with the ADA
ldquoCalifornia grocers are increasingly seen as great
targets for opportunistic drive-by ADA public
access lawsuitsrdquo said CGA President Ron Fong
ldquoDespite recent changes to law serial plaintiffs
continue to send demand letters and file frivolous
lawsuits against grocers in an attempt to extract
monetary settlements We created this toolkit to
help retailers fend off these lawsuitsrdquo
The Grocery Compliance Toolkit was created as
a CGA member benefit to help grocery retailers
understand and manage the risks associated with
complying with state regulations related to the
grocery industry
The first ldquotoolrdquo was released last year and focused
on hazardous waste disposal
CGA members can download both the ADA and
hazardous waste disposal ldquotoolsrdquo from CGArsquos website
wwwcagrocerscom along with viewing both
seminars
CGA will release additional compliance ldquotoolsrdquo in the
coming months n
2014 2015
Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM
Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years
VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA
SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION
For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute
llaacutemenos o visite nuestra pagina de internet
Variety is the spice of lifeEnjoy it with our award winning
premium authentic line of cheeses
While that may hold true in the Lone Star State our
friends from Texas may be shocked to find that the
middle of the road in California is a relatively safe
place to be But finding safety on those center lines
wasnrsquot always so easy
Open primaries and the rise of the moderates
particularly on the Democratic side of the aisle have
widened that middle of the road from a dangerously
thin series of narrow yellow stripes to a ten-foot
wide median safe from most passing traffic
In a nation that divides its states into a red column
(for Republicans) and a blue column (for Democrats)
California exists solidly in the blue column with
Democrats holding every statewide office as well as
near supermajorities in both legislative houses
However a closer look reveals unexpected patches of
purple dotting the political map
Within these purple areas are a number of legislative
districts that reflect a uniquely Californian political
identity ndash a laissez faire attitude on social issues
mixed with a more conservative middle-of-the-road
view towards taxes and regulation
It was the voters in these areas the backers of
Proposition 14 had in mind back in 2010 when they
successfully pressed for passage of this initiative
to bring open primaries to California effectively
changing the game of legislative elections in our state
The rationale for passage was simple
In an overall political climate that often forced
candidates to the far-left and far-right during
primary elections in order to cater to the base to
win their partyrsquos nomination the general election
would often leave middle-of-the-road voters from
both parties (as well as independents) with no viable
candidates to support
GO
VE
RN
ME
NT
RE
LA
TIO
NS
Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD
BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo
In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses
Continued on p 18
Aaron Moreno Senior Director
Government Relations CGA
iStock
CA
LIF
OR
NIA
GR
OC
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If all candidates stood for primary election at the
same time with all voters choosing the top-two vote
getters for the general election regardless of party
open primary backers reasoned that candidates
would have to broaden their appeal to all voters in
a legislative district not to just the ldquotrue believersrdquo
who often decided primary elections The result
would be more moderate legislators be they
Democrat or Republican
This has been the case as
illustrated by the elections
of Republicans Catherine
Baker and David Hadley
in Assembly districts that
had elected Democrats in
previous election cycles Both
won due to their willingness
and ability to speak to voters from
both parties from the primary all the way
to the general election This would not have been
possible without open primaries
The open primary has not only changed the strategy
of candidates looking to enter the Legislature it
has also changed the way interest groups develop
strategies to elect legislators that best represent their
world views
Californiarsquos business interests have been particularly
savvy in adapting to these changes by adopting
strategies for supporting legislative candidates
that were once unheard of There was once a time
when it was automatic that these business interests
only backed Republican candidates This has
changed particularly in districts with a majority of
Democratic voters
In these districts it is not uncommon to see a
general election featuring two Democrats These
types of races provide a perfect synergy between
Democrats running from a more moderate position
and business interests who see a benefit from having
such political perspectives in the Legislature
This new breed of moderate Democrat would
have found it hard to advance out of a traditional
Democratic primary where the winner was decided
by the hard-core base
In the open primary system a moderate Democrat
can not only survive but thrive making it to the
general election by taking positions that appeal not
just to their fellow Democrats but to decline-to-state
and even moderate Republican voters
While remaining socially liberal like more
traditional Democrats moderates stand apart
by taking firm stances against new taxes and
unnecessary government regulation ndash two views
that align them with business interests
around the state
And the business community
has taken note spending
millions of dollars over the
past few years either in direct
donations to candidates
or the establishment of
political action committees
spending on behalf of
a candidate to elect more
moderate Democrats This has had
a big impact on the Legislature particularly in the
Assembly where the informal but highly influential
Moderate Caucus holds sway
Numbering anywhere from 10 to 15 depending on
who you ask and what is up for a vote on a particular
day this bloc of Democrats led by Assemblymembers
Rudy Salas from Bakersfield and Jim Cooper from
Sacramento have had considerable success helping
the business community in recent years by using
their influence to either water down legislation that
would adversely affect business preventing such
bills from being voted on by the full Assembly
or voting with Republicans to kill anti-business
legislation
Some notable business victories facilitated by the
Moderate Democrats during last yearrsquos legislative
DEM
REP
The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views
Continued from p 17
G O V E R N M E N T R E L AT I O N SCONTINUED
|
CA
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OR
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OC
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CA
LIF
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G O V E R N M E N T R E L AT I O N S
session were the defeat of legislation that would
have required a 50 percent reduction in petroleum
use in motor vehicles the preventing of legislation
increasing the minimum wage from being heard on
the Assembly Floor and the preventing of legislation
requiring predictive scheduling from also being
heard on the Assembly Floor among others
Business groups such as CGA and others have
benefitted from supporting the candidacies of
these Moderate Democrats While their support
is certainly not 100 percent even their support 50
to 60 percent of the time is enough to stave off the
seemingly never-ending onslaught of legislation that
has the potential to put a damper on the business
climate in California
Those percentages may not seem like much but
when you consider that without open primaries the
Democrats coming from these same Democratic
majority districts would often stand with business
20 percent of the time or less the value of Moderate
Democrats to business is high
So while the middle of the road in Texas may be
nothing more than road kill armadillos and yellow
stripes the medians in California are wide berths
that provide a cushion for business from forces that
donrsquot necessarily have their best interests in mind
We must all do our part to keep that cushion in
place The election of Moderate Democrats whenever
possible is a great way to do so n
Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto
Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats
July 27-28 2016
Register today at
wwwfresnofoodexpocom
For more information contact
Amy Fuentes at 559-227-9999
or infofresnofoodexpocom
Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much
more than just a trade show The Fresno Food Expo is a celebration of Central
Californiarsquos vibrant food community and a showcase of our regionrsquos most
innovative food and beverage producers
Whether you are sourcing for fresh product deli baked goods or beer and wine
the Fresno Food Expo is your opportunity to connect with local trendsetters and
CEOrsquos behind some of the nationrsquos largest food companies right in their backyard
Come sit at our table and join us for an experience
you wonrsquot find anywhere else
Discover the abundance of Central Californiarsquos Food Region
FREE Buyer Registration
raquo Grower amp Manufacturer Site Tours
raquo VIP Event amp Opening Reception
raquo Buyerrsquos Breakfast
raquo Business to Business Trade Show
Your registration includes access to the following events
FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo
C A P I T O L I N S I D E R
Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program
Californiarsquos Beverage Container Recycling
Program was created by legislation 30 years ago
At that time recycling was a new word and the
intent of the program was to change
consumer habit Glass and aluminum
containers were sold with a surcharge
which the consumer would receive
back if they returned the containers
In that day and age people
commonly purchased six-packs
of glass soda bottles from
their grocery store They were
encouraged to bring those
glass containers back to the
store and exchange them
for the next six-pack they
purchased The convenience
of bringing containers back to
the store was the impetus for
the convenience zones created
by the law
At that time curbside recycling
didnrsquot exist nor were there
any real markets for recycled
material
Over the years a lot has
changed in California
Our communities are different
The definition of convenience
has changed Industries reliant
on manufacturing with recycled
materials have been born and are
thriving Most important we have
changed the Californiarsquos throw away culture to
one focused on recycling and reuse
Yet Californiarsquos Bottle Bill has failed to keep up
with the times
Today the perfect storm is brewing
A number of California communities are revolting
against convenience zone recyclers placing fees
and others obstacles before them in an
effort to keep them away
These recyclers while generating the
majority of containers returned through
the program attract patrons that many
community leaders and grocery store
customers prefer not to see in the
parking lot of their local grocery
store
Petroleum prices have driven the
scrap price for plastic to a historic
low making recycled content more
expensive than virgin product
In addition the formula Cal Recycle
uses to determine the overall cost
of recycling has failed to accurately
capture recent increases in minimum
wage and other cost factors These
three elements combined have made
it nearly impossible for convenience
zone recyclers to remain in business
This is evident by the announcement
from RePlanet the Statersquos largest
convenience zone recycler in late
January to decertify 200 locations in
Northern California
The decertification of convenience
zones starts a process for Cal Recycle
First they are required to review the zones
where each site was located They can either
choose to exempt the zone from further service
or change the status of the zone from served to
unserved
LOUIE BROWN
Partner in the
Sacramento office
of Kahn Soares and
Conway LLP
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C A P I T O L I N S I D E R
The decision to change a zone to unserved triggers an
announcement by Cal Recycle to all dealers in the zone
that they have 30 days to decide to take containers back
in the store or pay the $100 per day ldquoin lieurdquo fee
Cal Recycle is evaluating the zones impacted by the
decertification of RePlanet Since the number of
exempted zones is capped by statute it is expected Cal
Recycle will be forced to change the status on a large
number of zones to unserved and likely impact hundreds
of dealers in northern California This process is expected
to take the next 90 to 120 days to complete
In the meantime CGA and others are developing a
legislative strategy to address these issues before grocers
are required to take action Your legislative team is
focused on a comprehensive solution that takes the
grocer out of the position of the recycler of last resort
along with a number of other changes to bring the
program into 2016 n
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21
Dog chow n at u r a l plus vitamins amp minerals
is made with real chicken There ARE no artificial colors
and Yoshiloves itloves itloves it
I makeNO ARTIFICIALCOLORS OR PRESERVATIVES
MADEWITH Real Chicken
ldquo
rdquoBARBARA JDog Chow ProductionDavenport IA
I makeCOLORS OR PRESERVATIVES
New
Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA
reg
P E R S P E C T I V E
Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business
There are several proposed ballot measures that
may be on the November statewide ballot that
would make significant changes to Californiarsquos
minimum wage and tax laws This article takes
a brief look at the four competing tax increase
measures as well as two competing minimum
wage measures
COMPETING TAX INCREASE INITIATIVES FOR
2016 BALLOT
There are four competing tax increase measures
on this yearrsquos ballot They include
n A proposal by the California Hospital
Association and SEIU-UHW that would expand
and make permanent income tax increases
on Californiarsquos highest earners but also allow
Prop 30rsquos sales tax increase to expire in 2016
as scheduled
n A plan by SEIU-UHW and the California
Teachers Association that would extend the
income tax increases under Prop 30 until
2030 and would let the sales tax increase
expire in 2016 as scheduled
n A third measure would impose a significant
surcharge on property valued over $3 million
n A fourth measure would increase the tax on
tobacco products by $2 per pack
ldquoThe School Funding and Budget Stability Act
of 2016rdquo No 15-0065
This measure would extend until 112031 the
personal income tax rates established by Prop
30 and dedicate the funds entirely to schools
without the ability of the Legislature to suspend
or withhold funds even in a state budget crisis
The measure also exempts these funds from
the Statersquos Rainy Day Fund established by voters
in 2014 by Prop 2 (requiring a portion of state
revenues be allocated to the state budget reserve
and to paying down debt)
In Section 3 of the measure the following
statements of purpose and intent are set forth
ldquo(a) The chief purpose of this measure is to
protect our schools by temporarily extending
current income tax rates on wealthy
Californians instead of awarding a huge tax
break to couples earning more than half a
million dollars a year or individuals earning
more than a quarter million Instead of
sending money back into the pockets of the
wealthy this measure sends the money to a
special account that must be spent exclusively
on schools
ldquo(b) This measure is intended to keep California
on a track toward balanced budgets and
reliable funding for schools and community
colleges preventing a new round of
devastating cuts to public education and a
return to the days of chronic budget deficits
and funding cuts
ldquo(c) This measure guarantees in the Constitution
that the revenues it raises for schools will
be sent directly to school districts and
community colleges for classroom expenses
not administrative costs This school funding
cannot be suspended or withheld no matter
what happens with the state budgetrdquo
ldquoThe Invest in Californiarsquos Children Actrdquo
No 15-0070
This measure would make permanent the Prop
30 personal income tax rates after 2019 plus add
additional higher rates for those earning above
$1 million per year (individuals) or $2 million
(married filing jointly) with the highest bracket
of 143 percent and earmark the funds for
CHRIS MICHEL I
Legislative Advocate
Aprea amp Micheli Inc
Continued on p 24
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23
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
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CA
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24
P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
|
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26
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Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
CA
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
CA
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WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
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copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
LUM
INA
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Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
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CA
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
OR
NIA
GR
OC
ER |
37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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OC
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
CA
LIF
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NIA
GR
OC
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
LIF
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NIA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
NIA
GR
OC
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
OR
NIA
GR
OC
ER |
47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
OR
NIA
GR
OC
ER
48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
LIF
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
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IFO
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
CG
A N
EW
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rammed a $5 increase in Californiarsquos minimum
wage through the entire legislative process in
just three days They did so without meaningful
conversation or an opportunity for businesses that
will bear the cost burden to weigh in on the issuerdquo
Attendees were also briefed by CGA staff on the key
issues they would discuss during their legislative
visits These topics included employee scheduling
wine coupons food bank donation tax credits and
the statersquos beleaguered beverage container recycling
program
Following an afternoon of legislative meetings
CGA hosted its annual Presidentrsquos Reception that
allowed Grocers Day attendees to meet again with
state legislators and staff but in a more relaxed
environment
CGA also hosted its popular Ice Cream Social
located this year inside the State Capitol and was
sponsored by Clover Stornetta Farms which provided
the ice cream n
The Association wishes to thank all sponsoring companies for their generous support of this yearrsquos Grocers Day
Gold Level Albertsons Safeway Vons amp Pavilions Coca-Cola Refreshments Unified Grocers Inc
Silver Level CampS Wholesale Grocers Costco Wholesale Gelsonrsquos Markets Retail Marketing Services Inc
Bronze Level Food 4 LessRancho San Miguel Markets Grocery Outlet North State Grocery Inc Nutricion Fundamental Ralphs Grocery CompanyFood 4 Less Smart amp Final
Breakfast Kellogg Company Save Mart Supermarkets
Luncheon Jelly Belly Candy Co
Ice Cream Social Clover Stornetta Farms Inc
Presidentrsquos Reception Command Packaging MillerCoors
Legislative visits highlighted CGArsquos Grocers Day at the Capitol
Clover Stornetta Farms sponsored this yearrsquos Ice Cream Social
Assemblymember Frank Bigelow Troy Dinan Raleyrsquos Ron Fong CGA
CG
A N
EW
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Foundation Selects New Trustee ChairBrad Askeland Vice President
Holiday Markets has
been elected Chair of the
California Grocers Association
Educational Foundation
Board of Trustees Askeland
had previously served as
Foundation Vice Chair
Askeland succeeds former CGAEF Chair Jim Van
Gorkom NuCal Foods who served in that position
since 2011 Mark Johnson Unified Grocers Inc was
elected to replace Askeland as the Boardrsquos Vice Chair
Jacquie Slobom Gelsonrsquos Markets and Jerry Landers
Raleyrsquos will continue as the Foundationrsquos Secretary
and Treasurer respectively
ldquoWe look forward to Brad building on the programs
Jim was instrumental in fosteringrdquo said CGAEF
President Ron Fong
Askelandrsquos responsibilities will be to guide and direct
the CGAEF Board of Trustees The Foundation
was created in 1992 to advance Californiarsquos grocery
industry through employee education industry
research and recognition of excellence
Askeland who has served as a Trustee since 2009
began his grocery career in 1988 as a courtesy clerk
for a small independent market before joining
North State Grocery Inc in 1995 He managed
several stores before being named director of human
resources in 2003 n
SEC Store Tour Features Draegerrsquos MarketThe California
Grocers Associationrsquo
Supplier Executive
Council kicked off
its 2016 Store Tour
series in March at
Draegerrsquos Market in
San Mateo The tour
was led by Richard
Draeger chief
operations officer
for the company
The Draeger executive led the SEC members on an
aisle-by-aisle tour sharing his companyrsquos business
philosophy and strategy Draeger told attendees that
for his company itrsquos not about having the lowest
prices but ldquomaking things easier for the consumerrdquo
He added that shopping local is what makes
Draegerrsquos different
Following the tour SEC members were treated to
a luncheon hosted by Draegerrsquos popular in-store
cooking school To learn more about becoming
an SEC member contact Sunny Porter CGA
at (916) 448-3545 n
New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER
Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes
Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom
Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo
2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916
The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals
CMYKFOCUS ON ALLERGENSTopical educational sessions and resources
June 5 - 7 | Houston
FOR MORE INFORMATION IDDBAORG 6083105000
REGISTER TODAYEXPANDED EXPO HOURS
NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths
SHOW amp SELL CENTERCAKE DECORATING CHALLENGE
MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH
JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain
CG
A N
EW
S|
C
AL
IFO
RN
IA G
RO
CE
R
14
CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in
March the second ldquotoolrdquo in its Grocery Compliance
Toolkit ndash this one focused on the Americans with
Disabilities Act
CGA contracted with the Sacramento-based law firm
of Downey Brand LLP to create a comprehensive
user-friendly ADA compliance guideline In addition
CGA hosted two regional seminars in conjunction
with the release of the ADA compliance ldquotoolrdquo In
addition the CGA Educational Foundation hosted a
one-hour webinar conducted by Downey Brand that
outlined the specifics of complying with the ADA
ldquoCalifornia grocers are increasingly seen as great
targets for opportunistic drive-by ADA public
access lawsuitsrdquo said CGA President Ron Fong
ldquoDespite recent changes to law serial plaintiffs
continue to send demand letters and file frivolous
lawsuits against grocers in an attempt to extract
monetary settlements We created this toolkit to
help retailers fend off these lawsuitsrdquo
The Grocery Compliance Toolkit was created as
a CGA member benefit to help grocery retailers
understand and manage the risks associated with
complying with state regulations related to the
grocery industry
The first ldquotoolrdquo was released last year and focused
on hazardous waste disposal
CGA members can download both the ADA and
hazardous waste disposal ldquotoolsrdquo from CGArsquos website
wwwcagrocerscom along with viewing both
seminars
CGA will release additional compliance ldquotoolsrdquo in the
coming months n
2014 2015
Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM
Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years
VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA
SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION
For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute
llaacutemenos o visite nuestra pagina de internet
Variety is the spice of lifeEnjoy it with our award winning
premium authentic line of cheeses
While that may hold true in the Lone Star State our
friends from Texas may be shocked to find that the
middle of the road in California is a relatively safe
place to be But finding safety on those center lines
wasnrsquot always so easy
Open primaries and the rise of the moderates
particularly on the Democratic side of the aisle have
widened that middle of the road from a dangerously
thin series of narrow yellow stripes to a ten-foot
wide median safe from most passing traffic
In a nation that divides its states into a red column
(for Republicans) and a blue column (for Democrats)
California exists solidly in the blue column with
Democrats holding every statewide office as well as
near supermajorities in both legislative houses
However a closer look reveals unexpected patches of
purple dotting the political map
Within these purple areas are a number of legislative
districts that reflect a uniquely Californian political
identity ndash a laissez faire attitude on social issues
mixed with a more conservative middle-of-the-road
view towards taxes and regulation
It was the voters in these areas the backers of
Proposition 14 had in mind back in 2010 when they
successfully pressed for passage of this initiative
to bring open primaries to California effectively
changing the game of legislative elections in our state
The rationale for passage was simple
In an overall political climate that often forced
candidates to the far-left and far-right during
primary elections in order to cater to the base to
win their partyrsquos nomination the general election
would often leave middle-of-the-road voters from
both parties (as well as independents) with no viable
candidates to support
GO
VE
RN
ME
NT
RE
LA
TIO
NS
Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD
BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo
In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses
Continued on p 18
Aaron Moreno Senior Director
Government Relations CGA
iStock
CA
LIF
OR
NIA
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OC
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17
If all candidates stood for primary election at the
same time with all voters choosing the top-two vote
getters for the general election regardless of party
open primary backers reasoned that candidates
would have to broaden their appeal to all voters in
a legislative district not to just the ldquotrue believersrdquo
who often decided primary elections The result
would be more moderate legislators be they
Democrat or Republican
This has been the case as
illustrated by the elections
of Republicans Catherine
Baker and David Hadley
in Assembly districts that
had elected Democrats in
previous election cycles Both
won due to their willingness
and ability to speak to voters from
both parties from the primary all the way
to the general election This would not have been
possible without open primaries
The open primary has not only changed the strategy
of candidates looking to enter the Legislature it
has also changed the way interest groups develop
strategies to elect legislators that best represent their
world views
Californiarsquos business interests have been particularly
savvy in adapting to these changes by adopting
strategies for supporting legislative candidates
that were once unheard of There was once a time
when it was automatic that these business interests
only backed Republican candidates This has
changed particularly in districts with a majority of
Democratic voters
In these districts it is not uncommon to see a
general election featuring two Democrats These
types of races provide a perfect synergy between
Democrats running from a more moderate position
and business interests who see a benefit from having
such political perspectives in the Legislature
This new breed of moderate Democrat would
have found it hard to advance out of a traditional
Democratic primary where the winner was decided
by the hard-core base
In the open primary system a moderate Democrat
can not only survive but thrive making it to the
general election by taking positions that appeal not
just to their fellow Democrats but to decline-to-state
and even moderate Republican voters
While remaining socially liberal like more
traditional Democrats moderates stand apart
by taking firm stances against new taxes and
unnecessary government regulation ndash two views
that align them with business interests
around the state
And the business community
has taken note spending
millions of dollars over the
past few years either in direct
donations to candidates
or the establishment of
political action committees
spending on behalf of
a candidate to elect more
moderate Democrats This has had
a big impact on the Legislature particularly in the
Assembly where the informal but highly influential
Moderate Caucus holds sway
Numbering anywhere from 10 to 15 depending on
who you ask and what is up for a vote on a particular
day this bloc of Democrats led by Assemblymembers
Rudy Salas from Bakersfield and Jim Cooper from
Sacramento have had considerable success helping
the business community in recent years by using
their influence to either water down legislation that
would adversely affect business preventing such
bills from being voted on by the full Assembly
or voting with Republicans to kill anti-business
legislation
Some notable business victories facilitated by the
Moderate Democrats during last yearrsquos legislative
DEM
REP
The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views
Continued from p 17
G O V E R N M E N T R E L AT I O N SCONTINUED
|
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OC
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18
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LIF
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19
G O V E R N M E N T R E L AT I O N S
session were the defeat of legislation that would
have required a 50 percent reduction in petroleum
use in motor vehicles the preventing of legislation
increasing the minimum wage from being heard on
the Assembly Floor and the preventing of legislation
requiring predictive scheduling from also being
heard on the Assembly Floor among others
Business groups such as CGA and others have
benefitted from supporting the candidacies of
these Moderate Democrats While their support
is certainly not 100 percent even their support 50
to 60 percent of the time is enough to stave off the
seemingly never-ending onslaught of legislation that
has the potential to put a damper on the business
climate in California
Those percentages may not seem like much but
when you consider that without open primaries the
Democrats coming from these same Democratic
majority districts would often stand with business
20 percent of the time or less the value of Moderate
Democrats to business is high
So while the middle of the road in Texas may be
nothing more than road kill armadillos and yellow
stripes the medians in California are wide berths
that provide a cushion for business from forces that
donrsquot necessarily have their best interests in mind
We must all do our part to keep that cushion in
place The election of Moderate Democrats whenever
possible is a great way to do so n
Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto
Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats
July 27-28 2016
Register today at
wwwfresnofoodexpocom
For more information contact
Amy Fuentes at 559-227-9999
or infofresnofoodexpocom
Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much
more than just a trade show The Fresno Food Expo is a celebration of Central
Californiarsquos vibrant food community and a showcase of our regionrsquos most
innovative food and beverage producers
Whether you are sourcing for fresh product deli baked goods or beer and wine
the Fresno Food Expo is your opportunity to connect with local trendsetters and
CEOrsquos behind some of the nationrsquos largest food companies right in their backyard
Come sit at our table and join us for an experience
you wonrsquot find anywhere else
Discover the abundance of Central Californiarsquos Food Region
FREE Buyer Registration
raquo Grower amp Manufacturer Site Tours
raquo VIP Event amp Opening Reception
raquo Buyerrsquos Breakfast
raquo Business to Business Trade Show
Your registration includes access to the following events
FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo
C A P I T O L I N S I D E R
Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program
Californiarsquos Beverage Container Recycling
Program was created by legislation 30 years ago
At that time recycling was a new word and the
intent of the program was to change
consumer habit Glass and aluminum
containers were sold with a surcharge
which the consumer would receive
back if they returned the containers
In that day and age people
commonly purchased six-packs
of glass soda bottles from
their grocery store They were
encouraged to bring those
glass containers back to the
store and exchange them
for the next six-pack they
purchased The convenience
of bringing containers back to
the store was the impetus for
the convenience zones created
by the law
At that time curbside recycling
didnrsquot exist nor were there
any real markets for recycled
material
Over the years a lot has
changed in California
Our communities are different
The definition of convenience
has changed Industries reliant
on manufacturing with recycled
materials have been born and are
thriving Most important we have
changed the Californiarsquos throw away culture to
one focused on recycling and reuse
Yet Californiarsquos Bottle Bill has failed to keep up
with the times
Today the perfect storm is brewing
A number of California communities are revolting
against convenience zone recyclers placing fees
and others obstacles before them in an
effort to keep them away
These recyclers while generating the
majority of containers returned through
the program attract patrons that many
community leaders and grocery store
customers prefer not to see in the
parking lot of their local grocery
store
Petroleum prices have driven the
scrap price for plastic to a historic
low making recycled content more
expensive than virgin product
In addition the formula Cal Recycle
uses to determine the overall cost
of recycling has failed to accurately
capture recent increases in minimum
wage and other cost factors These
three elements combined have made
it nearly impossible for convenience
zone recyclers to remain in business
This is evident by the announcement
from RePlanet the Statersquos largest
convenience zone recycler in late
January to decertify 200 locations in
Northern California
The decertification of convenience
zones starts a process for Cal Recycle
First they are required to review the zones
where each site was located They can either
choose to exempt the zone from further service
or change the status of the zone from served to
unserved
LOUIE BROWN
Partner in the
Sacramento office
of Kahn Soares and
Conway LLP
iStock
|
CA
LIF
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C A P I T O L I N S I D E R
The decision to change a zone to unserved triggers an
announcement by Cal Recycle to all dealers in the zone
that they have 30 days to decide to take containers back
in the store or pay the $100 per day ldquoin lieurdquo fee
Cal Recycle is evaluating the zones impacted by the
decertification of RePlanet Since the number of
exempted zones is capped by statute it is expected Cal
Recycle will be forced to change the status on a large
number of zones to unserved and likely impact hundreds
of dealers in northern California This process is expected
to take the next 90 to 120 days to complete
In the meantime CGA and others are developing a
legislative strategy to address these issues before grocers
are required to take action Your legislative team is
focused on a comprehensive solution that takes the
grocer out of the position of the recycler of last resort
along with a number of other changes to bring the
program into 2016 n
iStock
CA
LIF
OR
NIA
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OC
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21
Dog chow n at u r a l plus vitamins amp minerals
is made with real chicken There ARE no artificial colors
and Yoshiloves itloves itloves it
I makeNO ARTIFICIALCOLORS OR PRESERVATIVES
MADEWITH Real Chicken
ldquo
rdquoBARBARA JDog Chow ProductionDavenport IA
I makeCOLORS OR PRESERVATIVES
New
Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA
reg
P E R S P E C T I V E
Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business
There are several proposed ballot measures that
may be on the November statewide ballot that
would make significant changes to Californiarsquos
minimum wage and tax laws This article takes
a brief look at the four competing tax increase
measures as well as two competing minimum
wage measures
COMPETING TAX INCREASE INITIATIVES FOR
2016 BALLOT
There are four competing tax increase measures
on this yearrsquos ballot They include
n A proposal by the California Hospital
Association and SEIU-UHW that would expand
and make permanent income tax increases
on Californiarsquos highest earners but also allow
Prop 30rsquos sales tax increase to expire in 2016
as scheduled
n A plan by SEIU-UHW and the California
Teachers Association that would extend the
income tax increases under Prop 30 until
2030 and would let the sales tax increase
expire in 2016 as scheduled
n A third measure would impose a significant
surcharge on property valued over $3 million
n A fourth measure would increase the tax on
tobacco products by $2 per pack
ldquoThe School Funding and Budget Stability Act
of 2016rdquo No 15-0065
This measure would extend until 112031 the
personal income tax rates established by Prop
30 and dedicate the funds entirely to schools
without the ability of the Legislature to suspend
or withhold funds even in a state budget crisis
The measure also exempts these funds from
the Statersquos Rainy Day Fund established by voters
in 2014 by Prop 2 (requiring a portion of state
revenues be allocated to the state budget reserve
and to paying down debt)
In Section 3 of the measure the following
statements of purpose and intent are set forth
ldquo(a) The chief purpose of this measure is to
protect our schools by temporarily extending
current income tax rates on wealthy
Californians instead of awarding a huge tax
break to couples earning more than half a
million dollars a year or individuals earning
more than a quarter million Instead of
sending money back into the pockets of the
wealthy this measure sends the money to a
special account that must be spent exclusively
on schools
ldquo(b) This measure is intended to keep California
on a track toward balanced budgets and
reliable funding for schools and community
colleges preventing a new round of
devastating cuts to public education and a
return to the days of chronic budget deficits
and funding cuts
ldquo(c) This measure guarantees in the Constitution
that the revenues it raises for schools will
be sent directly to school districts and
community colleges for classroom expenses
not administrative costs This school funding
cannot be suspended or withheld no matter
what happens with the state budgetrdquo
ldquoThe Invest in Californiarsquos Children Actrdquo
No 15-0070
This measure would make permanent the Prop
30 personal income tax rates after 2019 plus add
additional higher rates for those earning above
$1 million per year (individuals) or $2 million
(married filing jointly) with the highest bracket
of 143 percent and earmark the funds for
CHRIS MICHEL I
Legislative Advocate
Aprea amp Micheli Inc
Continued on p 24
CA
LIF
OR
NIA
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OC
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23
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
|
CA
LIF
OR
NIA
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OC
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24
P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
|
CA
LIF
OR
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OC
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26
CA
LIF
OR
NIA
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OC
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27
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
CA
LIF
OR
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OC
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
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29
WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
iStock
|
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30
copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
LUM
INA
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RS
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LIF
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33
Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
|
CA
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
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LIF
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
CA
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
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NIA
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
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GR
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
RN
IA G
RO
CE
R |
55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
OR
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
OR
NIA
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
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IFO
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
GR
OC
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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
CG
A N
EW
S|
C
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Foundation Selects New Trustee ChairBrad Askeland Vice President
Holiday Markets has
been elected Chair of the
California Grocers Association
Educational Foundation
Board of Trustees Askeland
had previously served as
Foundation Vice Chair
Askeland succeeds former CGAEF Chair Jim Van
Gorkom NuCal Foods who served in that position
since 2011 Mark Johnson Unified Grocers Inc was
elected to replace Askeland as the Boardrsquos Vice Chair
Jacquie Slobom Gelsonrsquos Markets and Jerry Landers
Raleyrsquos will continue as the Foundationrsquos Secretary
and Treasurer respectively
ldquoWe look forward to Brad building on the programs
Jim was instrumental in fosteringrdquo said CGAEF
President Ron Fong
Askelandrsquos responsibilities will be to guide and direct
the CGAEF Board of Trustees The Foundation
was created in 1992 to advance Californiarsquos grocery
industry through employee education industry
research and recognition of excellence
Askeland who has served as a Trustee since 2009
began his grocery career in 1988 as a courtesy clerk
for a small independent market before joining
North State Grocery Inc in 1995 He managed
several stores before being named director of human
resources in 2003 n
SEC Store Tour Features Draegerrsquos MarketThe California
Grocers Associationrsquo
Supplier Executive
Council kicked off
its 2016 Store Tour
series in March at
Draegerrsquos Market in
San Mateo The tour
was led by Richard
Draeger chief
operations officer
for the company
The Draeger executive led the SEC members on an
aisle-by-aisle tour sharing his companyrsquos business
philosophy and strategy Draeger told attendees that
for his company itrsquos not about having the lowest
prices but ldquomaking things easier for the consumerrdquo
He added that shopping local is what makes
Draegerrsquos different
Following the tour SEC members were treated to
a luncheon hosted by Draegerrsquos popular in-store
cooking school To learn more about becoming
an SEC member contact Sunny Porter CGA
at (916) 448-3545 n
New MembersCGA WELCOMES THE FOLLOWING NEW MEMBER
Fresno Food Expo1100 W Shaw Ste 140Fresno CA 93711Contact Amy Fuentes
Show ManagerE-mail amynalchajiancomTel (559) 227-9999Website wwwfresnofoodexpocom
Richard Draeger (left) hosted the SEC Store Tour of Draegerrsquos Market in San Mateo
2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916
The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals
CMYKFOCUS ON ALLERGENSTopical educational sessions and resources
June 5 - 7 | Houston
FOR MORE INFORMATION IDDBAORG 6083105000
REGISTER TODAYEXPANDED EXPO HOURS
NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths
SHOW amp SELL CENTERCAKE DECORATING CHALLENGE
MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH
JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain
CG
A N
EW
S|
C
AL
IFO
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CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in
March the second ldquotoolrdquo in its Grocery Compliance
Toolkit ndash this one focused on the Americans with
Disabilities Act
CGA contracted with the Sacramento-based law firm
of Downey Brand LLP to create a comprehensive
user-friendly ADA compliance guideline In addition
CGA hosted two regional seminars in conjunction
with the release of the ADA compliance ldquotoolrdquo In
addition the CGA Educational Foundation hosted a
one-hour webinar conducted by Downey Brand that
outlined the specifics of complying with the ADA
ldquoCalifornia grocers are increasingly seen as great
targets for opportunistic drive-by ADA public
access lawsuitsrdquo said CGA President Ron Fong
ldquoDespite recent changes to law serial plaintiffs
continue to send demand letters and file frivolous
lawsuits against grocers in an attempt to extract
monetary settlements We created this toolkit to
help retailers fend off these lawsuitsrdquo
The Grocery Compliance Toolkit was created as
a CGA member benefit to help grocery retailers
understand and manage the risks associated with
complying with state regulations related to the
grocery industry
The first ldquotoolrdquo was released last year and focused
on hazardous waste disposal
CGA members can download both the ADA and
hazardous waste disposal ldquotoolsrdquo from CGArsquos website
wwwcagrocerscom along with viewing both
seminars
CGA will release additional compliance ldquotoolsrdquo in the
coming months n
2014 2015
Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM
Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years
VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA
SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION
For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute
llaacutemenos o visite nuestra pagina de internet
Variety is the spice of lifeEnjoy it with our award winning
premium authentic line of cheeses
While that may hold true in the Lone Star State our
friends from Texas may be shocked to find that the
middle of the road in California is a relatively safe
place to be But finding safety on those center lines
wasnrsquot always so easy
Open primaries and the rise of the moderates
particularly on the Democratic side of the aisle have
widened that middle of the road from a dangerously
thin series of narrow yellow stripes to a ten-foot
wide median safe from most passing traffic
In a nation that divides its states into a red column
(for Republicans) and a blue column (for Democrats)
California exists solidly in the blue column with
Democrats holding every statewide office as well as
near supermajorities in both legislative houses
However a closer look reveals unexpected patches of
purple dotting the political map
Within these purple areas are a number of legislative
districts that reflect a uniquely Californian political
identity ndash a laissez faire attitude on social issues
mixed with a more conservative middle-of-the-road
view towards taxes and regulation
It was the voters in these areas the backers of
Proposition 14 had in mind back in 2010 when they
successfully pressed for passage of this initiative
to bring open primaries to California effectively
changing the game of legislative elections in our state
The rationale for passage was simple
In an overall political climate that often forced
candidates to the far-left and far-right during
primary elections in order to cater to the base to
win their partyrsquos nomination the general election
would often leave middle-of-the-road voters from
both parties (as well as independents) with no viable
candidates to support
GO
VE
RN
ME
NT
RE
LA
TIO
NS
Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD
BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo
In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses
Continued on p 18
Aaron Moreno Senior Director
Government Relations CGA
iStock
CA
LIF
OR
NIA
GR
OC
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17
If all candidates stood for primary election at the
same time with all voters choosing the top-two vote
getters for the general election regardless of party
open primary backers reasoned that candidates
would have to broaden their appeal to all voters in
a legislative district not to just the ldquotrue believersrdquo
who often decided primary elections The result
would be more moderate legislators be they
Democrat or Republican
This has been the case as
illustrated by the elections
of Republicans Catherine
Baker and David Hadley
in Assembly districts that
had elected Democrats in
previous election cycles Both
won due to their willingness
and ability to speak to voters from
both parties from the primary all the way
to the general election This would not have been
possible without open primaries
The open primary has not only changed the strategy
of candidates looking to enter the Legislature it
has also changed the way interest groups develop
strategies to elect legislators that best represent their
world views
Californiarsquos business interests have been particularly
savvy in adapting to these changes by adopting
strategies for supporting legislative candidates
that were once unheard of There was once a time
when it was automatic that these business interests
only backed Republican candidates This has
changed particularly in districts with a majority of
Democratic voters
In these districts it is not uncommon to see a
general election featuring two Democrats These
types of races provide a perfect synergy between
Democrats running from a more moderate position
and business interests who see a benefit from having
such political perspectives in the Legislature
This new breed of moderate Democrat would
have found it hard to advance out of a traditional
Democratic primary where the winner was decided
by the hard-core base
In the open primary system a moderate Democrat
can not only survive but thrive making it to the
general election by taking positions that appeal not
just to their fellow Democrats but to decline-to-state
and even moderate Republican voters
While remaining socially liberal like more
traditional Democrats moderates stand apart
by taking firm stances against new taxes and
unnecessary government regulation ndash two views
that align them with business interests
around the state
And the business community
has taken note spending
millions of dollars over the
past few years either in direct
donations to candidates
or the establishment of
political action committees
spending on behalf of
a candidate to elect more
moderate Democrats This has had
a big impact on the Legislature particularly in the
Assembly where the informal but highly influential
Moderate Caucus holds sway
Numbering anywhere from 10 to 15 depending on
who you ask and what is up for a vote on a particular
day this bloc of Democrats led by Assemblymembers
Rudy Salas from Bakersfield and Jim Cooper from
Sacramento have had considerable success helping
the business community in recent years by using
their influence to either water down legislation that
would adversely affect business preventing such
bills from being voted on by the full Assembly
or voting with Republicans to kill anti-business
legislation
Some notable business victories facilitated by the
Moderate Democrats during last yearrsquos legislative
DEM
REP
The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views
Continued from p 17
G O V E R N M E N T R E L AT I O N SCONTINUED
|
CA
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OC
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CA
LIF
OR
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OC
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19
G O V E R N M E N T R E L AT I O N S
session were the defeat of legislation that would
have required a 50 percent reduction in petroleum
use in motor vehicles the preventing of legislation
increasing the minimum wage from being heard on
the Assembly Floor and the preventing of legislation
requiring predictive scheduling from also being
heard on the Assembly Floor among others
Business groups such as CGA and others have
benefitted from supporting the candidacies of
these Moderate Democrats While their support
is certainly not 100 percent even their support 50
to 60 percent of the time is enough to stave off the
seemingly never-ending onslaught of legislation that
has the potential to put a damper on the business
climate in California
Those percentages may not seem like much but
when you consider that without open primaries the
Democrats coming from these same Democratic
majority districts would often stand with business
20 percent of the time or less the value of Moderate
Democrats to business is high
So while the middle of the road in Texas may be
nothing more than road kill armadillos and yellow
stripes the medians in California are wide berths
that provide a cushion for business from forces that
donrsquot necessarily have their best interests in mind
We must all do our part to keep that cushion in
place The election of Moderate Democrats whenever
possible is a great way to do so n
Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto
Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats
July 27-28 2016
Register today at
wwwfresnofoodexpocom
For more information contact
Amy Fuentes at 559-227-9999
or infofresnofoodexpocom
Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much
more than just a trade show The Fresno Food Expo is a celebration of Central
Californiarsquos vibrant food community and a showcase of our regionrsquos most
innovative food and beverage producers
Whether you are sourcing for fresh product deli baked goods or beer and wine
the Fresno Food Expo is your opportunity to connect with local trendsetters and
CEOrsquos behind some of the nationrsquos largest food companies right in their backyard
Come sit at our table and join us for an experience
you wonrsquot find anywhere else
Discover the abundance of Central Californiarsquos Food Region
FREE Buyer Registration
raquo Grower amp Manufacturer Site Tours
raquo VIP Event amp Opening Reception
raquo Buyerrsquos Breakfast
raquo Business to Business Trade Show
Your registration includes access to the following events
FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo
C A P I T O L I N S I D E R
Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program
Californiarsquos Beverage Container Recycling
Program was created by legislation 30 years ago
At that time recycling was a new word and the
intent of the program was to change
consumer habit Glass and aluminum
containers were sold with a surcharge
which the consumer would receive
back if they returned the containers
In that day and age people
commonly purchased six-packs
of glass soda bottles from
their grocery store They were
encouraged to bring those
glass containers back to the
store and exchange them
for the next six-pack they
purchased The convenience
of bringing containers back to
the store was the impetus for
the convenience zones created
by the law
At that time curbside recycling
didnrsquot exist nor were there
any real markets for recycled
material
Over the years a lot has
changed in California
Our communities are different
The definition of convenience
has changed Industries reliant
on manufacturing with recycled
materials have been born and are
thriving Most important we have
changed the Californiarsquos throw away culture to
one focused on recycling and reuse
Yet Californiarsquos Bottle Bill has failed to keep up
with the times
Today the perfect storm is brewing
A number of California communities are revolting
against convenience zone recyclers placing fees
and others obstacles before them in an
effort to keep them away
These recyclers while generating the
majority of containers returned through
the program attract patrons that many
community leaders and grocery store
customers prefer not to see in the
parking lot of their local grocery
store
Petroleum prices have driven the
scrap price for plastic to a historic
low making recycled content more
expensive than virgin product
In addition the formula Cal Recycle
uses to determine the overall cost
of recycling has failed to accurately
capture recent increases in minimum
wage and other cost factors These
three elements combined have made
it nearly impossible for convenience
zone recyclers to remain in business
This is evident by the announcement
from RePlanet the Statersquos largest
convenience zone recycler in late
January to decertify 200 locations in
Northern California
The decertification of convenience
zones starts a process for Cal Recycle
First they are required to review the zones
where each site was located They can either
choose to exempt the zone from further service
or change the status of the zone from served to
unserved
LOUIE BROWN
Partner in the
Sacramento office
of Kahn Soares and
Conway LLP
iStock
|
CA
LIF
OR
NIA
GR
OC
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20
C A P I T O L I N S I D E R
The decision to change a zone to unserved triggers an
announcement by Cal Recycle to all dealers in the zone
that they have 30 days to decide to take containers back
in the store or pay the $100 per day ldquoin lieurdquo fee
Cal Recycle is evaluating the zones impacted by the
decertification of RePlanet Since the number of
exempted zones is capped by statute it is expected Cal
Recycle will be forced to change the status on a large
number of zones to unserved and likely impact hundreds
of dealers in northern California This process is expected
to take the next 90 to 120 days to complete
In the meantime CGA and others are developing a
legislative strategy to address these issues before grocers
are required to take action Your legislative team is
focused on a comprehensive solution that takes the
grocer out of the position of the recycler of last resort
along with a number of other changes to bring the
program into 2016 n
iStock
CA
LIF
OR
NIA
GR
OC
ER |
21
Dog chow n at u r a l plus vitamins amp minerals
is made with real chicken There ARE no artificial colors
and Yoshiloves itloves itloves it
I makeNO ARTIFICIALCOLORS OR PRESERVATIVES
MADEWITH Real Chicken
ldquo
rdquoBARBARA JDog Chow ProductionDavenport IA
I makeCOLORS OR PRESERVATIVES
New
Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA
reg
P E R S P E C T I V E
Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business
There are several proposed ballot measures that
may be on the November statewide ballot that
would make significant changes to Californiarsquos
minimum wage and tax laws This article takes
a brief look at the four competing tax increase
measures as well as two competing minimum
wage measures
COMPETING TAX INCREASE INITIATIVES FOR
2016 BALLOT
There are four competing tax increase measures
on this yearrsquos ballot They include
n A proposal by the California Hospital
Association and SEIU-UHW that would expand
and make permanent income tax increases
on Californiarsquos highest earners but also allow
Prop 30rsquos sales tax increase to expire in 2016
as scheduled
n A plan by SEIU-UHW and the California
Teachers Association that would extend the
income tax increases under Prop 30 until
2030 and would let the sales tax increase
expire in 2016 as scheduled
n A third measure would impose a significant
surcharge on property valued over $3 million
n A fourth measure would increase the tax on
tobacco products by $2 per pack
ldquoThe School Funding and Budget Stability Act
of 2016rdquo No 15-0065
This measure would extend until 112031 the
personal income tax rates established by Prop
30 and dedicate the funds entirely to schools
without the ability of the Legislature to suspend
or withhold funds even in a state budget crisis
The measure also exempts these funds from
the Statersquos Rainy Day Fund established by voters
in 2014 by Prop 2 (requiring a portion of state
revenues be allocated to the state budget reserve
and to paying down debt)
In Section 3 of the measure the following
statements of purpose and intent are set forth
ldquo(a) The chief purpose of this measure is to
protect our schools by temporarily extending
current income tax rates on wealthy
Californians instead of awarding a huge tax
break to couples earning more than half a
million dollars a year or individuals earning
more than a quarter million Instead of
sending money back into the pockets of the
wealthy this measure sends the money to a
special account that must be spent exclusively
on schools
ldquo(b) This measure is intended to keep California
on a track toward balanced budgets and
reliable funding for schools and community
colleges preventing a new round of
devastating cuts to public education and a
return to the days of chronic budget deficits
and funding cuts
ldquo(c) This measure guarantees in the Constitution
that the revenues it raises for schools will
be sent directly to school districts and
community colleges for classroom expenses
not administrative costs This school funding
cannot be suspended or withheld no matter
what happens with the state budgetrdquo
ldquoThe Invest in Californiarsquos Children Actrdquo
No 15-0070
This measure would make permanent the Prop
30 personal income tax rates after 2019 plus add
additional higher rates for those earning above
$1 million per year (individuals) or $2 million
(married filing jointly) with the highest bracket
of 143 percent and earmark the funds for
CHRIS MICHEL I
Legislative Advocate
Aprea amp Micheli Inc
Continued on p 24
CA
LIF
OR
NIA
GR
OC
ER |
23
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
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24
P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
|
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26
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LIF
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OC
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27
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
CA
LIF
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
CA
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29
WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
iStock
|
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30
copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
LUM
INA
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33
Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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GR
OC
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
CA
LIF
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
NIA
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
OR
NIA
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OC
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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NIA
GR
OC
ER
48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
LIF
OR
NIA
GR
OC
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
OR
NIA
GR
OC
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
OR
NIA
GR
OC
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
RN
IA G
RO
CE
R |
55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
OR
NIA
GR
OC
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
OR
NIA
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OC
ER |
59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
OR
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GR
OC
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
OR
NIA
GR
OC
ER
64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
OR
NIA
GR
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
RN
IA G
RO
CE
R
66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
GR
OC
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
2016 IDDBA 4C bull ldquoThe Essentialrdquo bull 7rdquo X 10rdquo California Grocer Ad (328)Beltrame Leffler Advertising bull (317) 916-9930 bull 032816 bull S2GA010916
The Essential (HAVE-TO-BE-THERE) Seminar and ExpoFor Dairy Deli and Bakery Professionals
CMYKFOCUS ON ALLERGENSTopical educational sessions and resources
June 5 - 7 | Houston
FOR MORE INFORMATION IDDBAORG 6083105000
REGISTER TODAYEXPANDED EXPO HOURS
NETWORKINGbull 9000 Professionalsbull 700 Exhibitorsbull 1900 Booths
SHOW amp SELL CENTERCAKE DECORATING CHALLENGE
MERCHANDISINGNEW PRODUCT SHOWCASEINDUSTRY RESEARCH
JJ Watt Randi Zuckerberg Simon SinekLidia Bastianich Lori GreinerAnthony Bourdain
CG
A N
EW
S|
C
AL
IFO
RN
IA G
RO
CE
R
14
CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in
March the second ldquotoolrdquo in its Grocery Compliance
Toolkit ndash this one focused on the Americans with
Disabilities Act
CGA contracted with the Sacramento-based law firm
of Downey Brand LLP to create a comprehensive
user-friendly ADA compliance guideline In addition
CGA hosted two regional seminars in conjunction
with the release of the ADA compliance ldquotoolrdquo In
addition the CGA Educational Foundation hosted a
one-hour webinar conducted by Downey Brand that
outlined the specifics of complying with the ADA
ldquoCalifornia grocers are increasingly seen as great
targets for opportunistic drive-by ADA public
access lawsuitsrdquo said CGA President Ron Fong
ldquoDespite recent changes to law serial plaintiffs
continue to send demand letters and file frivolous
lawsuits against grocers in an attempt to extract
monetary settlements We created this toolkit to
help retailers fend off these lawsuitsrdquo
The Grocery Compliance Toolkit was created as
a CGA member benefit to help grocery retailers
understand and manage the risks associated with
complying with state regulations related to the
grocery industry
The first ldquotoolrdquo was released last year and focused
on hazardous waste disposal
CGA members can download both the ADA and
hazardous waste disposal ldquotoolsrdquo from CGArsquos website
wwwcagrocerscom along with viewing both
seminars
CGA will release additional compliance ldquotoolsrdquo in the
coming months n
2014 2015
Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM
Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years
VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA
SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION
For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute
llaacutemenos o visite nuestra pagina de internet
Variety is the spice of lifeEnjoy it with our award winning
premium authentic line of cheeses
While that may hold true in the Lone Star State our
friends from Texas may be shocked to find that the
middle of the road in California is a relatively safe
place to be But finding safety on those center lines
wasnrsquot always so easy
Open primaries and the rise of the moderates
particularly on the Democratic side of the aisle have
widened that middle of the road from a dangerously
thin series of narrow yellow stripes to a ten-foot
wide median safe from most passing traffic
In a nation that divides its states into a red column
(for Republicans) and a blue column (for Democrats)
California exists solidly in the blue column with
Democrats holding every statewide office as well as
near supermajorities in both legislative houses
However a closer look reveals unexpected patches of
purple dotting the political map
Within these purple areas are a number of legislative
districts that reflect a uniquely Californian political
identity ndash a laissez faire attitude on social issues
mixed with a more conservative middle-of-the-road
view towards taxes and regulation
It was the voters in these areas the backers of
Proposition 14 had in mind back in 2010 when they
successfully pressed for passage of this initiative
to bring open primaries to California effectively
changing the game of legislative elections in our state
The rationale for passage was simple
In an overall political climate that often forced
candidates to the far-left and far-right during
primary elections in order to cater to the base to
win their partyrsquos nomination the general election
would often leave middle-of-the-road voters from
both parties (as well as independents) with no viable
candidates to support
GO
VE
RN
ME
NT
RE
LA
TIO
NS
Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD
BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo
In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses
Continued on p 18
Aaron Moreno Senior Director
Government Relations CGA
iStock
CA
LIF
OR
NIA
GR
OC
ER |
17
If all candidates stood for primary election at the
same time with all voters choosing the top-two vote
getters for the general election regardless of party
open primary backers reasoned that candidates
would have to broaden their appeal to all voters in
a legislative district not to just the ldquotrue believersrdquo
who often decided primary elections The result
would be more moderate legislators be they
Democrat or Republican
This has been the case as
illustrated by the elections
of Republicans Catherine
Baker and David Hadley
in Assembly districts that
had elected Democrats in
previous election cycles Both
won due to their willingness
and ability to speak to voters from
both parties from the primary all the way
to the general election This would not have been
possible without open primaries
The open primary has not only changed the strategy
of candidates looking to enter the Legislature it
has also changed the way interest groups develop
strategies to elect legislators that best represent their
world views
Californiarsquos business interests have been particularly
savvy in adapting to these changes by adopting
strategies for supporting legislative candidates
that were once unheard of There was once a time
when it was automatic that these business interests
only backed Republican candidates This has
changed particularly in districts with a majority of
Democratic voters
In these districts it is not uncommon to see a
general election featuring two Democrats These
types of races provide a perfect synergy between
Democrats running from a more moderate position
and business interests who see a benefit from having
such political perspectives in the Legislature
This new breed of moderate Democrat would
have found it hard to advance out of a traditional
Democratic primary where the winner was decided
by the hard-core base
In the open primary system a moderate Democrat
can not only survive but thrive making it to the
general election by taking positions that appeal not
just to their fellow Democrats but to decline-to-state
and even moderate Republican voters
While remaining socially liberal like more
traditional Democrats moderates stand apart
by taking firm stances against new taxes and
unnecessary government regulation ndash two views
that align them with business interests
around the state
And the business community
has taken note spending
millions of dollars over the
past few years either in direct
donations to candidates
or the establishment of
political action committees
spending on behalf of
a candidate to elect more
moderate Democrats This has had
a big impact on the Legislature particularly in the
Assembly where the informal but highly influential
Moderate Caucus holds sway
Numbering anywhere from 10 to 15 depending on
who you ask and what is up for a vote on a particular
day this bloc of Democrats led by Assemblymembers
Rudy Salas from Bakersfield and Jim Cooper from
Sacramento have had considerable success helping
the business community in recent years by using
their influence to either water down legislation that
would adversely affect business preventing such
bills from being voted on by the full Assembly
or voting with Republicans to kill anti-business
legislation
Some notable business victories facilitated by the
Moderate Democrats during last yearrsquos legislative
DEM
REP
The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views
Continued from p 17
G O V E R N M E N T R E L AT I O N SCONTINUED
|
CA
LIF
OR
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GR
OC
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18
CA
LIF
OR
NIA
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OC
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19
G O V E R N M E N T R E L AT I O N S
session were the defeat of legislation that would
have required a 50 percent reduction in petroleum
use in motor vehicles the preventing of legislation
increasing the minimum wage from being heard on
the Assembly Floor and the preventing of legislation
requiring predictive scheduling from also being
heard on the Assembly Floor among others
Business groups such as CGA and others have
benefitted from supporting the candidacies of
these Moderate Democrats While their support
is certainly not 100 percent even their support 50
to 60 percent of the time is enough to stave off the
seemingly never-ending onslaught of legislation that
has the potential to put a damper on the business
climate in California
Those percentages may not seem like much but
when you consider that without open primaries the
Democrats coming from these same Democratic
majority districts would often stand with business
20 percent of the time or less the value of Moderate
Democrats to business is high
So while the middle of the road in Texas may be
nothing more than road kill armadillos and yellow
stripes the medians in California are wide berths
that provide a cushion for business from forces that
donrsquot necessarily have their best interests in mind
We must all do our part to keep that cushion in
place The election of Moderate Democrats whenever
possible is a great way to do so n
Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto
Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats
July 27-28 2016
Register today at
wwwfresnofoodexpocom
For more information contact
Amy Fuentes at 559-227-9999
or infofresnofoodexpocom
Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much
more than just a trade show The Fresno Food Expo is a celebration of Central
Californiarsquos vibrant food community and a showcase of our regionrsquos most
innovative food and beverage producers
Whether you are sourcing for fresh product deli baked goods or beer and wine
the Fresno Food Expo is your opportunity to connect with local trendsetters and
CEOrsquos behind some of the nationrsquos largest food companies right in their backyard
Come sit at our table and join us for an experience
you wonrsquot find anywhere else
Discover the abundance of Central Californiarsquos Food Region
FREE Buyer Registration
raquo Grower amp Manufacturer Site Tours
raquo VIP Event amp Opening Reception
raquo Buyerrsquos Breakfast
raquo Business to Business Trade Show
Your registration includes access to the following events
FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo
C A P I T O L I N S I D E R
Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program
Californiarsquos Beverage Container Recycling
Program was created by legislation 30 years ago
At that time recycling was a new word and the
intent of the program was to change
consumer habit Glass and aluminum
containers were sold with a surcharge
which the consumer would receive
back if they returned the containers
In that day and age people
commonly purchased six-packs
of glass soda bottles from
their grocery store They were
encouraged to bring those
glass containers back to the
store and exchange them
for the next six-pack they
purchased The convenience
of bringing containers back to
the store was the impetus for
the convenience zones created
by the law
At that time curbside recycling
didnrsquot exist nor were there
any real markets for recycled
material
Over the years a lot has
changed in California
Our communities are different
The definition of convenience
has changed Industries reliant
on manufacturing with recycled
materials have been born and are
thriving Most important we have
changed the Californiarsquos throw away culture to
one focused on recycling and reuse
Yet Californiarsquos Bottle Bill has failed to keep up
with the times
Today the perfect storm is brewing
A number of California communities are revolting
against convenience zone recyclers placing fees
and others obstacles before them in an
effort to keep them away
These recyclers while generating the
majority of containers returned through
the program attract patrons that many
community leaders and grocery store
customers prefer not to see in the
parking lot of their local grocery
store
Petroleum prices have driven the
scrap price for plastic to a historic
low making recycled content more
expensive than virgin product
In addition the formula Cal Recycle
uses to determine the overall cost
of recycling has failed to accurately
capture recent increases in minimum
wage and other cost factors These
three elements combined have made
it nearly impossible for convenience
zone recyclers to remain in business
This is evident by the announcement
from RePlanet the Statersquos largest
convenience zone recycler in late
January to decertify 200 locations in
Northern California
The decertification of convenience
zones starts a process for Cal Recycle
First they are required to review the zones
where each site was located They can either
choose to exempt the zone from further service
or change the status of the zone from served to
unserved
LOUIE BROWN
Partner in the
Sacramento office
of Kahn Soares and
Conway LLP
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C A P I T O L I N S I D E R
The decision to change a zone to unserved triggers an
announcement by Cal Recycle to all dealers in the zone
that they have 30 days to decide to take containers back
in the store or pay the $100 per day ldquoin lieurdquo fee
Cal Recycle is evaluating the zones impacted by the
decertification of RePlanet Since the number of
exempted zones is capped by statute it is expected Cal
Recycle will be forced to change the status on a large
number of zones to unserved and likely impact hundreds
of dealers in northern California This process is expected
to take the next 90 to 120 days to complete
In the meantime CGA and others are developing a
legislative strategy to address these issues before grocers
are required to take action Your legislative team is
focused on a comprehensive solution that takes the
grocer out of the position of the recycler of last resort
along with a number of other changes to bring the
program into 2016 n
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Dog chow n at u r a l plus vitamins amp minerals
is made with real chicken There ARE no artificial colors
and Yoshiloves itloves itloves it
I makeNO ARTIFICIALCOLORS OR PRESERVATIVES
MADEWITH Real Chicken
ldquo
rdquoBARBARA JDog Chow ProductionDavenport IA
I makeCOLORS OR PRESERVATIVES
New
Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA
reg
P E R S P E C T I V E
Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business
There are several proposed ballot measures that
may be on the November statewide ballot that
would make significant changes to Californiarsquos
minimum wage and tax laws This article takes
a brief look at the four competing tax increase
measures as well as two competing minimum
wage measures
COMPETING TAX INCREASE INITIATIVES FOR
2016 BALLOT
There are four competing tax increase measures
on this yearrsquos ballot They include
n A proposal by the California Hospital
Association and SEIU-UHW that would expand
and make permanent income tax increases
on Californiarsquos highest earners but also allow
Prop 30rsquos sales tax increase to expire in 2016
as scheduled
n A plan by SEIU-UHW and the California
Teachers Association that would extend the
income tax increases under Prop 30 until
2030 and would let the sales tax increase
expire in 2016 as scheduled
n A third measure would impose a significant
surcharge on property valued over $3 million
n A fourth measure would increase the tax on
tobacco products by $2 per pack
ldquoThe School Funding and Budget Stability Act
of 2016rdquo No 15-0065
This measure would extend until 112031 the
personal income tax rates established by Prop
30 and dedicate the funds entirely to schools
without the ability of the Legislature to suspend
or withhold funds even in a state budget crisis
The measure also exempts these funds from
the Statersquos Rainy Day Fund established by voters
in 2014 by Prop 2 (requiring a portion of state
revenues be allocated to the state budget reserve
and to paying down debt)
In Section 3 of the measure the following
statements of purpose and intent are set forth
ldquo(a) The chief purpose of this measure is to
protect our schools by temporarily extending
current income tax rates on wealthy
Californians instead of awarding a huge tax
break to couples earning more than half a
million dollars a year or individuals earning
more than a quarter million Instead of
sending money back into the pockets of the
wealthy this measure sends the money to a
special account that must be spent exclusively
on schools
ldquo(b) This measure is intended to keep California
on a track toward balanced budgets and
reliable funding for schools and community
colleges preventing a new round of
devastating cuts to public education and a
return to the days of chronic budget deficits
and funding cuts
ldquo(c) This measure guarantees in the Constitution
that the revenues it raises for schools will
be sent directly to school districts and
community colleges for classroom expenses
not administrative costs This school funding
cannot be suspended or withheld no matter
what happens with the state budgetrdquo
ldquoThe Invest in Californiarsquos Children Actrdquo
No 15-0070
This measure would make permanent the Prop
30 personal income tax rates after 2019 plus add
additional higher rates for those earning above
$1 million per year (individuals) or $2 million
(married filing jointly) with the highest bracket
of 143 percent and earmark the funds for
CHRIS MICHEL I
Legislative Advocate
Aprea amp Micheli Inc
Continued on p 24
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23
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
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P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
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Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
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I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
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WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
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copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
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Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
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Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
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copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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NIA
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OC
ER |
39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
CA
LIF
OR
NIA
GR
OC
ER
40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
CA
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
LIF
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OC
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
NIA
GR
OC
ER
46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
OR
NIA
GR
OC
ER |
47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
OR
NIA
GR
OC
ER
48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
LIF
OR
NIA
GR
OC
ER |
51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
OR
NIA
GR
OC
ER
52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
OR
NIA
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OC
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
OR
NIA
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OC
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
OR
NIA
GR
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
GR
OC
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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
CG
A N
EW
S|
C
AL
IFO
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CGA Releases Second Grocery Compliance ToolkitThe California Grocers Associations released in
March the second ldquotoolrdquo in its Grocery Compliance
Toolkit ndash this one focused on the Americans with
Disabilities Act
CGA contracted with the Sacramento-based law firm
of Downey Brand LLP to create a comprehensive
user-friendly ADA compliance guideline In addition
CGA hosted two regional seminars in conjunction
with the release of the ADA compliance ldquotoolrdquo In
addition the CGA Educational Foundation hosted a
one-hour webinar conducted by Downey Brand that
outlined the specifics of complying with the ADA
ldquoCalifornia grocers are increasingly seen as great
targets for opportunistic drive-by ADA public
access lawsuitsrdquo said CGA President Ron Fong
ldquoDespite recent changes to law serial plaintiffs
continue to send demand letters and file frivolous
lawsuits against grocers in an attempt to extract
monetary settlements We created this toolkit to
help retailers fend off these lawsuitsrdquo
The Grocery Compliance Toolkit was created as
a CGA member benefit to help grocery retailers
understand and manage the risks associated with
complying with state regulations related to the
grocery industry
The first ldquotoolrdquo was released last year and focused
on hazardous waste disposal
CGA members can download both the ADA and
hazardous waste disposal ldquotoolsrdquo from CGArsquos website
wwwcagrocerscom along with viewing both
seminars
CGA will release additional compliance ldquotoolsrdquo in the
coming months n
2014 2015
Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM
Discover the authenticity quality service and pride that fine grocersand restaurants across the country have experienced for over 50 years
VampVreg VampV SUPREMOreg CHIHUAHUAreg amp DESIGN ARE REGISTERED TRADEMARKS OF copyVampV SUPREMO FOODS INC 2016 DISTRIBUTOR CHICAGO IL 60608TOLL FREE 1-888-887-8773 bull MADE IN THE USA
SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION
For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute
llaacutemenos o visite nuestra pagina de internet
Variety is the spice of lifeEnjoy it with our award winning
premium authentic line of cheeses
While that may hold true in the Lone Star State our
friends from Texas may be shocked to find that the
middle of the road in California is a relatively safe
place to be But finding safety on those center lines
wasnrsquot always so easy
Open primaries and the rise of the moderates
particularly on the Democratic side of the aisle have
widened that middle of the road from a dangerously
thin series of narrow yellow stripes to a ten-foot
wide median safe from most passing traffic
In a nation that divides its states into a red column
(for Republicans) and a blue column (for Democrats)
California exists solidly in the blue column with
Democrats holding every statewide office as well as
near supermajorities in both legislative houses
However a closer look reveals unexpected patches of
purple dotting the political map
Within these purple areas are a number of legislative
districts that reflect a uniquely Californian political
identity ndash a laissez faire attitude on social issues
mixed with a more conservative middle-of-the-road
view towards taxes and regulation
It was the voters in these areas the backers of
Proposition 14 had in mind back in 2010 when they
successfully pressed for passage of this initiative
to bring open primaries to California effectively
changing the game of legislative elections in our state
The rationale for passage was simple
In an overall political climate that often forced
candidates to the far-left and far-right during
primary elections in order to cater to the base to
win their partyrsquos nomination the general election
would often leave middle-of-the-road voters from
both parties (as well as independents) with no viable
candidates to support
GO
VE
RN
ME
NT
RE
LA
TIO
NS
Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD
BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo
In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses
Continued on p 18
Aaron Moreno Senior Director
Government Relations CGA
iStock
CA
LIF
OR
NIA
GR
OC
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17
If all candidates stood for primary election at the
same time with all voters choosing the top-two vote
getters for the general election regardless of party
open primary backers reasoned that candidates
would have to broaden their appeal to all voters in
a legislative district not to just the ldquotrue believersrdquo
who often decided primary elections The result
would be more moderate legislators be they
Democrat or Republican
This has been the case as
illustrated by the elections
of Republicans Catherine
Baker and David Hadley
in Assembly districts that
had elected Democrats in
previous election cycles Both
won due to their willingness
and ability to speak to voters from
both parties from the primary all the way
to the general election This would not have been
possible without open primaries
The open primary has not only changed the strategy
of candidates looking to enter the Legislature it
has also changed the way interest groups develop
strategies to elect legislators that best represent their
world views
Californiarsquos business interests have been particularly
savvy in adapting to these changes by adopting
strategies for supporting legislative candidates
that were once unheard of There was once a time
when it was automatic that these business interests
only backed Republican candidates This has
changed particularly in districts with a majority of
Democratic voters
In these districts it is not uncommon to see a
general election featuring two Democrats These
types of races provide a perfect synergy between
Democrats running from a more moderate position
and business interests who see a benefit from having
such political perspectives in the Legislature
This new breed of moderate Democrat would
have found it hard to advance out of a traditional
Democratic primary where the winner was decided
by the hard-core base
In the open primary system a moderate Democrat
can not only survive but thrive making it to the
general election by taking positions that appeal not
just to their fellow Democrats but to decline-to-state
and even moderate Republican voters
While remaining socially liberal like more
traditional Democrats moderates stand apart
by taking firm stances against new taxes and
unnecessary government regulation ndash two views
that align them with business interests
around the state
And the business community
has taken note spending
millions of dollars over the
past few years either in direct
donations to candidates
or the establishment of
political action committees
spending on behalf of
a candidate to elect more
moderate Democrats This has had
a big impact on the Legislature particularly in the
Assembly where the informal but highly influential
Moderate Caucus holds sway
Numbering anywhere from 10 to 15 depending on
who you ask and what is up for a vote on a particular
day this bloc of Democrats led by Assemblymembers
Rudy Salas from Bakersfield and Jim Cooper from
Sacramento have had considerable success helping
the business community in recent years by using
their influence to either water down legislation that
would adversely affect business preventing such
bills from being voted on by the full Assembly
or voting with Republicans to kill anti-business
legislation
Some notable business victories facilitated by the
Moderate Democrats during last yearrsquos legislative
DEM
REP
The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views
Continued from p 17
G O V E R N M E N T R E L AT I O N SCONTINUED
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G O V E R N M E N T R E L AT I O N S
session were the defeat of legislation that would
have required a 50 percent reduction in petroleum
use in motor vehicles the preventing of legislation
increasing the minimum wage from being heard on
the Assembly Floor and the preventing of legislation
requiring predictive scheduling from also being
heard on the Assembly Floor among others
Business groups such as CGA and others have
benefitted from supporting the candidacies of
these Moderate Democrats While their support
is certainly not 100 percent even their support 50
to 60 percent of the time is enough to stave off the
seemingly never-ending onslaught of legislation that
has the potential to put a damper on the business
climate in California
Those percentages may not seem like much but
when you consider that without open primaries the
Democrats coming from these same Democratic
majority districts would often stand with business
20 percent of the time or less the value of Moderate
Democrats to business is high
So while the middle of the road in Texas may be
nothing more than road kill armadillos and yellow
stripes the medians in California are wide berths
that provide a cushion for business from forces that
donrsquot necessarily have their best interests in mind
We must all do our part to keep that cushion in
place The election of Moderate Democrats whenever
possible is a great way to do so n
Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto
Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats
July 27-28 2016
Register today at
wwwfresnofoodexpocom
For more information contact
Amy Fuentes at 559-227-9999
or infofresnofoodexpocom
Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much
more than just a trade show The Fresno Food Expo is a celebration of Central
Californiarsquos vibrant food community and a showcase of our regionrsquos most
innovative food and beverage producers
Whether you are sourcing for fresh product deli baked goods or beer and wine
the Fresno Food Expo is your opportunity to connect with local trendsetters and
CEOrsquos behind some of the nationrsquos largest food companies right in their backyard
Come sit at our table and join us for an experience
you wonrsquot find anywhere else
Discover the abundance of Central Californiarsquos Food Region
FREE Buyer Registration
raquo Grower amp Manufacturer Site Tours
raquo VIP Event amp Opening Reception
raquo Buyerrsquos Breakfast
raquo Business to Business Trade Show
Your registration includes access to the following events
FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo
C A P I T O L I N S I D E R
Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program
Californiarsquos Beverage Container Recycling
Program was created by legislation 30 years ago
At that time recycling was a new word and the
intent of the program was to change
consumer habit Glass and aluminum
containers were sold with a surcharge
which the consumer would receive
back if they returned the containers
In that day and age people
commonly purchased six-packs
of glass soda bottles from
their grocery store They were
encouraged to bring those
glass containers back to the
store and exchange them
for the next six-pack they
purchased The convenience
of bringing containers back to
the store was the impetus for
the convenience zones created
by the law
At that time curbside recycling
didnrsquot exist nor were there
any real markets for recycled
material
Over the years a lot has
changed in California
Our communities are different
The definition of convenience
has changed Industries reliant
on manufacturing with recycled
materials have been born and are
thriving Most important we have
changed the Californiarsquos throw away culture to
one focused on recycling and reuse
Yet Californiarsquos Bottle Bill has failed to keep up
with the times
Today the perfect storm is brewing
A number of California communities are revolting
against convenience zone recyclers placing fees
and others obstacles before them in an
effort to keep them away
These recyclers while generating the
majority of containers returned through
the program attract patrons that many
community leaders and grocery store
customers prefer not to see in the
parking lot of their local grocery
store
Petroleum prices have driven the
scrap price for plastic to a historic
low making recycled content more
expensive than virgin product
In addition the formula Cal Recycle
uses to determine the overall cost
of recycling has failed to accurately
capture recent increases in minimum
wage and other cost factors These
three elements combined have made
it nearly impossible for convenience
zone recyclers to remain in business
This is evident by the announcement
from RePlanet the Statersquos largest
convenience zone recycler in late
January to decertify 200 locations in
Northern California
The decertification of convenience
zones starts a process for Cal Recycle
First they are required to review the zones
where each site was located They can either
choose to exempt the zone from further service
or change the status of the zone from served to
unserved
LOUIE BROWN
Partner in the
Sacramento office
of Kahn Soares and
Conway LLP
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C A P I T O L I N S I D E R
The decision to change a zone to unserved triggers an
announcement by Cal Recycle to all dealers in the zone
that they have 30 days to decide to take containers back
in the store or pay the $100 per day ldquoin lieurdquo fee
Cal Recycle is evaluating the zones impacted by the
decertification of RePlanet Since the number of
exempted zones is capped by statute it is expected Cal
Recycle will be forced to change the status on a large
number of zones to unserved and likely impact hundreds
of dealers in northern California This process is expected
to take the next 90 to 120 days to complete
In the meantime CGA and others are developing a
legislative strategy to address these issues before grocers
are required to take action Your legislative team is
focused on a comprehensive solution that takes the
grocer out of the position of the recycler of last resort
along with a number of other changes to bring the
program into 2016 n
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21
Dog chow n at u r a l plus vitamins amp minerals
is made with real chicken There ARE no artificial colors
and Yoshiloves itloves itloves it
I makeNO ARTIFICIALCOLORS OR PRESERVATIVES
MADEWITH Real Chicken
ldquo
rdquoBARBARA JDog Chow ProductionDavenport IA
I makeCOLORS OR PRESERVATIVES
New
Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA
reg
P E R S P E C T I V E
Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business
There are several proposed ballot measures that
may be on the November statewide ballot that
would make significant changes to Californiarsquos
minimum wage and tax laws This article takes
a brief look at the four competing tax increase
measures as well as two competing minimum
wage measures
COMPETING TAX INCREASE INITIATIVES FOR
2016 BALLOT
There are four competing tax increase measures
on this yearrsquos ballot They include
n A proposal by the California Hospital
Association and SEIU-UHW that would expand
and make permanent income tax increases
on Californiarsquos highest earners but also allow
Prop 30rsquos sales tax increase to expire in 2016
as scheduled
n A plan by SEIU-UHW and the California
Teachers Association that would extend the
income tax increases under Prop 30 until
2030 and would let the sales tax increase
expire in 2016 as scheduled
n A third measure would impose a significant
surcharge on property valued over $3 million
n A fourth measure would increase the tax on
tobacco products by $2 per pack
ldquoThe School Funding and Budget Stability Act
of 2016rdquo No 15-0065
This measure would extend until 112031 the
personal income tax rates established by Prop
30 and dedicate the funds entirely to schools
without the ability of the Legislature to suspend
or withhold funds even in a state budget crisis
The measure also exempts these funds from
the Statersquos Rainy Day Fund established by voters
in 2014 by Prop 2 (requiring a portion of state
revenues be allocated to the state budget reserve
and to paying down debt)
In Section 3 of the measure the following
statements of purpose and intent are set forth
ldquo(a) The chief purpose of this measure is to
protect our schools by temporarily extending
current income tax rates on wealthy
Californians instead of awarding a huge tax
break to couples earning more than half a
million dollars a year or individuals earning
more than a quarter million Instead of
sending money back into the pockets of the
wealthy this measure sends the money to a
special account that must be spent exclusively
on schools
ldquo(b) This measure is intended to keep California
on a track toward balanced budgets and
reliable funding for schools and community
colleges preventing a new round of
devastating cuts to public education and a
return to the days of chronic budget deficits
and funding cuts
ldquo(c) This measure guarantees in the Constitution
that the revenues it raises for schools will
be sent directly to school districts and
community colleges for classroom expenses
not administrative costs This school funding
cannot be suspended or withheld no matter
what happens with the state budgetrdquo
ldquoThe Invest in Californiarsquos Children Actrdquo
No 15-0070
This measure would make permanent the Prop
30 personal income tax rates after 2019 plus add
additional higher rates for those earning above
$1 million per year (individuals) or $2 million
(married filing jointly) with the highest bracket
of 143 percent and earmark the funds for
CHRIS MICHEL I
Legislative Advocate
Aprea amp Micheli Inc
Continued on p 24
CA
LIF
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23
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
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LIF
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24
P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
|
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26
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Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
CA
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WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
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copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
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INA
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RS
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Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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OC
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
CA
LIF
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OC
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
LIF
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
NIA
GR
OC
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
OR
NIA
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OC
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
LIF
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
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CA
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
2014 2015
Morcilla QuesadillasQuesadilla Espantildeola con MorcillaDiscover new recipes at VVSUPREMOCOM
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SHREDDED OAXACA WAS AWARDED BEST OF CLASS ldquo2016rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WAS AWARDED BEST OF CLASS ldquo2014rdquo WORLD CHAMPIONSHIP CHEESE CONTEST QUESO CHIHUAHUAreg BRAND SHREDDED WITH JALAPENtildeO WAS AWARDED GOLD ldquo2014rdquo AND ldquo2015rdquo IN LOS ANGELES INTERNATIONAL DAIRY COMPETITION
For sales information and menu recommendations call our in-house Chef or visit our websitePara informacioacuten sobre ventas y recomendaciones para su menuacute
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Variety is the spice of lifeEnjoy it with our award winning
premium authentic line of cheeses
While that may hold true in the Lone Star State our
friends from Texas may be shocked to find that the
middle of the road in California is a relatively safe
place to be But finding safety on those center lines
wasnrsquot always so easy
Open primaries and the rise of the moderates
particularly on the Democratic side of the aisle have
widened that middle of the road from a dangerously
thin series of narrow yellow stripes to a ten-foot
wide median safe from most passing traffic
In a nation that divides its states into a red column
(for Republicans) and a blue column (for Democrats)
California exists solidly in the blue column with
Democrats holding every statewide office as well as
near supermajorities in both legislative houses
However a closer look reveals unexpected patches of
purple dotting the political map
Within these purple areas are a number of legislative
districts that reflect a uniquely Californian political
identity ndash a laissez faire attitude on social issues
mixed with a more conservative middle-of-the-road
view towards taxes and regulation
It was the voters in these areas the backers of
Proposition 14 had in mind back in 2010 when they
successfully pressed for passage of this initiative
to bring open primaries to California effectively
changing the game of legislative elections in our state
The rationale for passage was simple
In an overall political climate that often forced
candidates to the far-left and far-right during
primary elections in order to cater to the base to
win their partyrsquos nomination the general election
would often leave middle-of-the-road voters from
both parties (as well as independents) with no viable
candidates to support
GO
VE
RN
ME
NT
RE
LA
TIO
NS
Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD
BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo
In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses
Continued on p 18
Aaron Moreno Senior Director
Government Relations CGA
iStock
CA
LIF
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17
If all candidates stood for primary election at the
same time with all voters choosing the top-two vote
getters for the general election regardless of party
open primary backers reasoned that candidates
would have to broaden their appeal to all voters in
a legislative district not to just the ldquotrue believersrdquo
who often decided primary elections The result
would be more moderate legislators be they
Democrat or Republican
This has been the case as
illustrated by the elections
of Republicans Catherine
Baker and David Hadley
in Assembly districts that
had elected Democrats in
previous election cycles Both
won due to their willingness
and ability to speak to voters from
both parties from the primary all the way
to the general election This would not have been
possible without open primaries
The open primary has not only changed the strategy
of candidates looking to enter the Legislature it
has also changed the way interest groups develop
strategies to elect legislators that best represent their
world views
Californiarsquos business interests have been particularly
savvy in adapting to these changes by adopting
strategies for supporting legislative candidates
that were once unheard of There was once a time
when it was automatic that these business interests
only backed Republican candidates This has
changed particularly in districts with a majority of
Democratic voters
In these districts it is not uncommon to see a
general election featuring two Democrats These
types of races provide a perfect synergy between
Democrats running from a more moderate position
and business interests who see a benefit from having
such political perspectives in the Legislature
This new breed of moderate Democrat would
have found it hard to advance out of a traditional
Democratic primary where the winner was decided
by the hard-core base
In the open primary system a moderate Democrat
can not only survive but thrive making it to the
general election by taking positions that appeal not
just to their fellow Democrats but to decline-to-state
and even moderate Republican voters
While remaining socially liberal like more
traditional Democrats moderates stand apart
by taking firm stances against new taxes and
unnecessary government regulation ndash two views
that align them with business interests
around the state
And the business community
has taken note spending
millions of dollars over the
past few years either in direct
donations to candidates
or the establishment of
political action committees
spending on behalf of
a candidate to elect more
moderate Democrats This has had
a big impact on the Legislature particularly in the
Assembly where the informal but highly influential
Moderate Caucus holds sway
Numbering anywhere from 10 to 15 depending on
who you ask and what is up for a vote on a particular
day this bloc of Democrats led by Assemblymembers
Rudy Salas from Bakersfield and Jim Cooper from
Sacramento have had considerable success helping
the business community in recent years by using
their influence to either water down legislation that
would adversely affect business preventing such
bills from being voted on by the full Assembly
or voting with Republicans to kill anti-business
legislation
Some notable business victories facilitated by the
Moderate Democrats during last yearrsquos legislative
DEM
REP
The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views
Continued from p 17
G O V E R N M E N T R E L AT I O N SCONTINUED
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G O V E R N M E N T R E L AT I O N S
session were the defeat of legislation that would
have required a 50 percent reduction in petroleum
use in motor vehicles the preventing of legislation
increasing the minimum wage from being heard on
the Assembly Floor and the preventing of legislation
requiring predictive scheduling from also being
heard on the Assembly Floor among others
Business groups such as CGA and others have
benefitted from supporting the candidacies of
these Moderate Democrats While their support
is certainly not 100 percent even their support 50
to 60 percent of the time is enough to stave off the
seemingly never-ending onslaught of legislation that
has the potential to put a damper on the business
climate in California
Those percentages may not seem like much but
when you consider that without open primaries the
Democrats coming from these same Democratic
majority districts would often stand with business
20 percent of the time or less the value of Moderate
Democrats to business is high
So while the middle of the road in Texas may be
nothing more than road kill armadillos and yellow
stripes the medians in California are wide berths
that provide a cushion for business from forces that
donrsquot necessarily have their best interests in mind
We must all do our part to keep that cushion in
place The election of Moderate Democrats whenever
possible is a great way to do so n
Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto
Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats
July 27-28 2016
Register today at
wwwfresnofoodexpocom
For more information contact
Amy Fuentes at 559-227-9999
or infofresnofoodexpocom
Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much
more than just a trade show The Fresno Food Expo is a celebration of Central
Californiarsquos vibrant food community and a showcase of our regionrsquos most
innovative food and beverage producers
Whether you are sourcing for fresh product deli baked goods or beer and wine
the Fresno Food Expo is your opportunity to connect with local trendsetters and
CEOrsquos behind some of the nationrsquos largest food companies right in their backyard
Come sit at our table and join us for an experience
you wonrsquot find anywhere else
Discover the abundance of Central Californiarsquos Food Region
FREE Buyer Registration
raquo Grower amp Manufacturer Site Tours
raquo VIP Event amp Opening Reception
raquo Buyerrsquos Breakfast
raquo Business to Business Trade Show
Your registration includes access to the following events
FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo
C A P I T O L I N S I D E R
Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program
Californiarsquos Beverage Container Recycling
Program was created by legislation 30 years ago
At that time recycling was a new word and the
intent of the program was to change
consumer habit Glass and aluminum
containers were sold with a surcharge
which the consumer would receive
back if they returned the containers
In that day and age people
commonly purchased six-packs
of glass soda bottles from
their grocery store They were
encouraged to bring those
glass containers back to the
store and exchange them
for the next six-pack they
purchased The convenience
of bringing containers back to
the store was the impetus for
the convenience zones created
by the law
At that time curbside recycling
didnrsquot exist nor were there
any real markets for recycled
material
Over the years a lot has
changed in California
Our communities are different
The definition of convenience
has changed Industries reliant
on manufacturing with recycled
materials have been born and are
thriving Most important we have
changed the Californiarsquos throw away culture to
one focused on recycling and reuse
Yet Californiarsquos Bottle Bill has failed to keep up
with the times
Today the perfect storm is brewing
A number of California communities are revolting
against convenience zone recyclers placing fees
and others obstacles before them in an
effort to keep them away
These recyclers while generating the
majority of containers returned through
the program attract patrons that many
community leaders and grocery store
customers prefer not to see in the
parking lot of their local grocery
store
Petroleum prices have driven the
scrap price for plastic to a historic
low making recycled content more
expensive than virgin product
In addition the formula Cal Recycle
uses to determine the overall cost
of recycling has failed to accurately
capture recent increases in minimum
wage and other cost factors These
three elements combined have made
it nearly impossible for convenience
zone recyclers to remain in business
This is evident by the announcement
from RePlanet the Statersquos largest
convenience zone recycler in late
January to decertify 200 locations in
Northern California
The decertification of convenience
zones starts a process for Cal Recycle
First they are required to review the zones
where each site was located They can either
choose to exempt the zone from further service
or change the status of the zone from served to
unserved
LOUIE BROWN
Partner in the
Sacramento office
of Kahn Soares and
Conway LLP
iStock
|
CA
LIF
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C A P I T O L I N S I D E R
The decision to change a zone to unserved triggers an
announcement by Cal Recycle to all dealers in the zone
that they have 30 days to decide to take containers back
in the store or pay the $100 per day ldquoin lieurdquo fee
Cal Recycle is evaluating the zones impacted by the
decertification of RePlanet Since the number of
exempted zones is capped by statute it is expected Cal
Recycle will be forced to change the status on a large
number of zones to unserved and likely impact hundreds
of dealers in northern California This process is expected
to take the next 90 to 120 days to complete
In the meantime CGA and others are developing a
legislative strategy to address these issues before grocers
are required to take action Your legislative team is
focused on a comprehensive solution that takes the
grocer out of the position of the recycler of last resort
along with a number of other changes to bring the
program into 2016 n
iStock
CA
LIF
OR
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21
Dog chow n at u r a l plus vitamins amp minerals
is made with real chicken There ARE no artificial colors
and Yoshiloves itloves itloves it
I makeNO ARTIFICIALCOLORS OR PRESERVATIVES
MADEWITH Real Chicken
ldquo
rdquoBARBARA JDog Chow ProductionDavenport IA
I makeCOLORS OR PRESERVATIVES
New
Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA
reg
P E R S P E C T I V E
Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business
There are several proposed ballot measures that
may be on the November statewide ballot that
would make significant changes to Californiarsquos
minimum wage and tax laws This article takes
a brief look at the four competing tax increase
measures as well as two competing minimum
wage measures
COMPETING TAX INCREASE INITIATIVES FOR
2016 BALLOT
There are four competing tax increase measures
on this yearrsquos ballot They include
n A proposal by the California Hospital
Association and SEIU-UHW that would expand
and make permanent income tax increases
on Californiarsquos highest earners but also allow
Prop 30rsquos sales tax increase to expire in 2016
as scheduled
n A plan by SEIU-UHW and the California
Teachers Association that would extend the
income tax increases under Prop 30 until
2030 and would let the sales tax increase
expire in 2016 as scheduled
n A third measure would impose a significant
surcharge on property valued over $3 million
n A fourth measure would increase the tax on
tobacco products by $2 per pack
ldquoThe School Funding and Budget Stability Act
of 2016rdquo No 15-0065
This measure would extend until 112031 the
personal income tax rates established by Prop
30 and dedicate the funds entirely to schools
without the ability of the Legislature to suspend
or withhold funds even in a state budget crisis
The measure also exempts these funds from
the Statersquos Rainy Day Fund established by voters
in 2014 by Prop 2 (requiring a portion of state
revenues be allocated to the state budget reserve
and to paying down debt)
In Section 3 of the measure the following
statements of purpose and intent are set forth
ldquo(a) The chief purpose of this measure is to
protect our schools by temporarily extending
current income tax rates on wealthy
Californians instead of awarding a huge tax
break to couples earning more than half a
million dollars a year or individuals earning
more than a quarter million Instead of
sending money back into the pockets of the
wealthy this measure sends the money to a
special account that must be spent exclusively
on schools
ldquo(b) This measure is intended to keep California
on a track toward balanced budgets and
reliable funding for schools and community
colleges preventing a new round of
devastating cuts to public education and a
return to the days of chronic budget deficits
and funding cuts
ldquo(c) This measure guarantees in the Constitution
that the revenues it raises for schools will
be sent directly to school districts and
community colleges for classroom expenses
not administrative costs This school funding
cannot be suspended or withheld no matter
what happens with the state budgetrdquo
ldquoThe Invest in Californiarsquos Children Actrdquo
No 15-0070
This measure would make permanent the Prop
30 personal income tax rates after 2019 plus add
additional higher rates for those earning above
$1 million per year (individuals) or $2 million
(married filing jointly) with the highest bracket
of 143 percent and earmark the funds for
CHRIS MICHEL I
Legislative Advocate
Aprea amp Micheli Inc
Continued on p 24
CA
LIF
OR
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23
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
|
CA
LIF
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24
P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
|
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LIF
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OC
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CA
LIF
OR
NIA
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OC
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27
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
CA
LIF
OR
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
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29
WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
iStock
|
CA
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30
copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
LUM
INA
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RS
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33
Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
|
CA
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
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LIF
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
LIF
OR
NIA
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OC
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
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OR
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
OR
NIA
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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NIA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
RN
IA G
RO
CE
R |
55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
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GR
OC
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
OR
NIA
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
RN
IA G
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CE
R
66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
While that may hold true in the Lone Star State our
friends from Texas may be shocked to find that the
middle of the road in California is a relatively safe
place to be But finding safety on those center lines
wasnrsquot always so easy
Open primaries and the rise of the moderates
particularly on the Democratic side of the aisle have
widened that middle of the road from a dangerously
thin series of narrow yellow stripes to a ten-foot
wide median safe from most passing traffic
In a nation that divides its states into a red column
(for Republicans) and a blue column (for Democrats)
California exists solidly in the blue column with
Democrats holding every statewide office as well as
near supermajorities in both legislative houses
However a closer look reveals unexpected patches of
purple dotting the political map
Within these purple areas are a number of legislative
districts that reflect a uniquely Californian political
identity ndash a laissez faire attitude on social issues
mixed with a more conservative middle-of-the-road
view towards taxes and regulation
It was the voters in these areas the backers of
Proposition 14 had in mind back in 2010 when they
successfully pressed for passage of this initiative
to bring open primaries to California effectively
changing the game of legislative elections in our state
The rationale for passage was simple
In an overall political climate that often forced
candidates to the far-left and far-right during
primary elections in order to cater to the base to
win their partyrsquos nomination the general election
would often leave middle-of-the-road voters from
both parties (as well as independents) with no viable
candidates to support
GO
VE
RN
ME
NT
RE
LA
TIO
NS
Redefining ldquoMiddle of the RoadrdquoTHERE IS A SAYING IN TEXAS POLITICS ndash ldquoTHERErsquoS NOTHING IN THE MIDDLE OF THE ROAD
BUT YELLOW STRIPES AND DEAD ARMADILLOSrdquo
In a nation that divides its states into a red column (for Republicans) and a blue column (for Democrats) California exists solidly in the blue column with Democrats holding every statewide office as well as near supermajorities in both legislative houses
Continued on p 18
Aaron Moreno Senior Director
Government Relations CGA
iStock
CA
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If all candidates stood for primary election at the
same time with all voters choosing the top-two vote
getters for the general election regardless of party
open primary backers reasoned that candidates
would have to broaden their appeal to all voters in
a legislative district not to just the ldquotrue believersrdquo
who often decided primary elections The result
would be more moderate legislators be they
Democrat or Republican
This has been the case as
illustrated by the elections
of Republicans Catherine
Baker and David Hadley
in Assembly districts that
had elected Democrats in
previous election cycles Both
won due to their willingness
and ability to speak to voters from
both parties from the primary all the way
to the general election This would not have been
possible without open primaries
The open primary has not only changed the strategy
of candidates looking to enter the Legislature it
has also changed the way interest groups develop
strategies to elect legislators that best represent their
world views
Californiarsquos business interests have been particularly
savvy in adapting to these changes by adopting
strategies for supporting legislative candidates
that were once unheard of There was once a time
when it was automatic that these business interests
only backed Republican candidates This has
changed particularly in districts with a majority of
Democratic voters
In these districts it is not uncommon to see a
general election featuring two Democrats These
types of races provide a perfect synergy between
Democrats running from a more moderate position
and business interests who see a benefit from having
such political perspectives in the Legislature
This new breed of moderate Democrat would
have found it hard to advance out of a traditional
Democratic primary where the winner was decided
by the hard-core base
In the open primary system a moderate Democrat
can not only survive but thrive making it to the
general election by taking positions that appeal not
just to their fellow Democrats but to decline-to-state
and even moderate Republican voters
While remaining socially liberal like more
traditional Democrats moderates stand apart
by taking firm stances against new taxes and
unnecessary government regulation ndash two views
that align them with business interests
around the state
And the business community
has taken note spending
millions of dollars over the
past few years either in direct
donations to candidates
or the establishment of
political action committees
spending on behalf of
a candidate to elect more
moderate Democrats This has had
a big impact on the Legislature particularly in the
Assembly where the informal but highly influential
Moderate Caucus holds sway
Numbering anywhere from 10 to 15 depending on
who you ask and what is up for a vote on a particular
day this bloc of Democrats led by Assemblymembers
Rudy Salas from Bakersfield and Jim Cooper from
Sacramento have had considerable success helping
the business community in recent years by using
their influence to either water down legislation that
would adversely affect business preventing such
bills from being voted on by the full Assembly
or voting with Republicans to kill anti-business
legislation
Some notable business victories facilitated by the
Moderate Democrats during last yearrsquos legislative
DEM
REP
The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views
Continued from p 17
G O V E R N M E N T R E L AT I O N SCONTINUED
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G O V E R N M E N T R E L AT I O N S
session were the defeat of legislation that would
have required a 50 percent reduction in petroleum
use in motor vehicles the preventing of legislation
increasing the minimum wage from being heard on
the Assembly Floor and the preventing of legislation
requiring predictive scheduling from also being
heard on the Assembly Floor among others
Business groups such as CGA and others have
benefitted from supporting the candidacies of
these Moderate Democrats While their support
is certainly not 100 percent even their support 50
to 60 percent of the time is enough to stave off the
seemingly never-ending onslaught of legislation that
has the potential to put a damper on the business
climate in California
Those percentages may not seem like much but
when you consider that without open primaries the
Democrats coming from these same Democratic
majority districts would often stand with business
20 percent of the time or less the value of Moderate
Democrats to business is high
So while the middle of the road in Texas may be
nothing more than road kill armadillos and yellow
stripes the medians in California are wide berths
that provide a cushion for business from forces that
donrsquot necessarily have their best interests in mind
We must all do our part to keep that cushion in
place The election of Moderate Democrats whenever
possible is a great way to do so n
Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto
Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats
July 27-28 2016
Register today at
wwwfresnofoodexpocom
For more information contact
Amy Fuentes at 559-227-9999
or infofresnofoodexpocom
Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much
more than just a trade show The Fresno Food Expo is a celebration of Central
Californiarsquos vibrant food community and a showcase of our regionrsquos most
innovative food and beverage producers
Whether you are sourcing for fresh product deli baked goods or beer and wine
the Fresno Food Expo is your opportunity to connect with local trendsetters and
CEOrsquos behind some of the nationrsquos largest food companies right in their backyard
Come sit at our table and join us for an experience
you wonrsquot find anywhere else
Discover the abundance of Central Californiarsquos Food Region
FREE Buyer Registration
raquo Grower amp Manufacturer Site Tours
raquo VIP Event amp Opening Reception
raquo Buyerrsquos Breakfast
raquo Business to Business Trade Show
Your registration includes access to the following events
FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo
C A P I T O L I N S I D E R
Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program
Californiarsquos Beverage Container Recycling
Program was created by legislation 30 years ago
At that time recycling was a new word and the
intent of the program was to change
consumer habit Glass and aluminum
containers were sold with a surcharge
which the consumer would receive
back if they returned the containers
In that day and age people
commonly purchased six-packs
of glass soda bottles from
their grocery store They were
encouraged to bring those
glass containers back to the
store and exchange them
for the next six-pack they
purchased The convenience
of bringing containers back to
the store was the impetus for
the convenience zones created
by the law
At that time curbside recycling
didnrsquot exist nor were there
any real markets for recycled
material
Over the years a lot has
changed in California
Our communities are different
The definition of convenience
has changed Industries reliant
on manufacturing with recycled
materials have been born and are
thriving Most important we have
changed the Californiarsquos throw away culture to
one focused on recycling and reuse
Yet Californiarsquos Bottle Bill has failed to keep up
with the times
Today the perfect storm is brewing
A number of California communities are revolting
against convenience zone recyclers placing fees
and others obstacles before them in an
effort to keep them away
These recyclers while generating the
majority of containers returned through
the program attract patrons that many
community leaders and grocery store
customers prefer not to see in the
parking lot of their local grocery
store
Petroleum prices have driven the
scrap price for plastic to a historic
low making recycled content more
expensive than virgin product
In addition the formula Cal Recycle
uses to determine the overall cost
of recycling has failed to accurately
capture recent increases in minimum
wage and other cost factors These
three elements combined have made
it nearly impossible for convenience
zone recyclers to remain in business
This is evident by the announcement
from RePlanet the Statersquos largest
convenience zone recycler in late
January to decertify 200 locations in
Northern California
The decertification of convenience
zones starts a process for Cal Recycle
First they are required to review the zones
where each site was located They can either
choose to exempt the zone from further service
or change the status of the zone from served to
unserved
LOUIE BROWN
Partner in the
Sacramento office
of Kahn Soares and
Conway LLP
iStock
|
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C A P I T O L I N S I D E R
The decision to change a zone to unserved triggers an
announcement by Cal Recycle to all dealers in the zone
that they have 30 days to decide to take containers back
in the store or pay the $100 per day ldquoin lieurdquo fee
Cal Recycle is evaluating the zones impacted by the
decertification of RePlanet Since the number of
exempted zones is capped by statute it is expected Cal
Recycle will be forced to change the status on a large
number of zones to unserved and likely impact hundreds
of dealers in northern California This process is expected
to take the next 90 to 120 days to complete
In the meantime CGA and others are developing a
legislative strategy to address these issues before grocers
are required to take action Your legislative team is
focused on a comprehensive solution that takes the
grocer out of the position of the recycler of last resort
along with a number of other changes to bring the
program into 2016 n
iStock
CA
LIF
OR
NIA
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21
Dog chow n at u r a l plus vitamins amp minerals
is made with real chicken There ARE no artificial colors
and Yoshiloves itloves itloves it
I makeNO ARTIFICIALCOLORS OR PRESERVATIVES
MADEWITH Real Chicken
ldquo
rdquoBARBARA JDog Chow ProductionDavenport IA
I makeCOLORS OR PRESERVATIVES
New
Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA
reg
P E R S P E C T I V E
Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business
There are several proposed ballot measures that
may be on the November statewide ballot that
would make significant changes to Californiarsquos
minimum wage and tax laws This article takes
a brief look at the four competing tax increase
measures as well as two competing minimum
wage measures
COMPETING TAX INCREASE INITIATIVES FOR
2016 BALLOT
There are four competing tax increase measures
on this yearrsquos ballot They include
n A proposal by the California Hospital
Association and SEIU-UHW that would expand
and make permanent income tax increases
on Californiarsquos highest earners but also allow
Prop 30rsquos sales tax increase to expire in 2016
as scheduled
n A plan by SEIU-UHW and the California
Teachers Association that would extend the
income tax increases under Prop 30 until
2030 and would let the sales tax increase
expire in 2016 as scheduled
n A third measure would impose a significant
surcharge on property valued over $3 million
n A fourth measure would increase the tax on
tobacco products by $2 per pack
ldquoThe School Funding and Budget Stability Act
of 2016rdquo No 15-0065
This measure would extend until 112031 the
personal income tax rates established by Prop
30 and dedicate the funds entirely to schools
without the ability of the Legislature to suspend
or withhold funds even in a state budget crisis
The measure also exempts these funds from
the Statersquos Rainy Day Fund established by voters
in 2014 by Prop 2 (requiring a portion of state
revenues be allocated to the state budget reserve
and to paying down debt)
In Section 3 of the measure the following
statements of purpose and intent are set forth
ldquo(a) The chief purpose of this measure is to
protect our schools by temporarily extending
current income tax rates on wealthy
Californians instead of awarding a huge tax
break to couples earning more than half a
million dollars a year or individuals earning
more than a quarter million Instead of
sending money back into the pockets of the
wealthy this measure sends the money to a
special account that must be spent exclusively
on schools
ldquo(b) This measure is intended to keep California
on a track toward balanced budgets and
reliable funding for schools and community
colleges preventing a new round of
devastating cuts to public education and a
return to the days of chronic budget deficits
and funding cuts
ldquo(c) This measure guarantees in the Constitution
that the revenues it raises for schools will
be sent directly to school districts and
community colleges for classroom expenses
not administrative costs This school funding
cannot be suspended or withheld no matter
what happens with the state budgetrdquo
ldquoThe Invest in Californiarsquos Children Actrdquo
No 15-0070
This measure would make permanent the Prop
30 personal income tax rates after 2019 plus add
additional higher rates for those earning above
$1 million per year (individuals) or $2 million
(married filing jointly) with the highest bracket
of 143 percent and earmark the funds for
CHRIS MICHEL I
Legislative Advocate
Aprea amp Micheli Inc
Continued on p 24
CA
LIF
OR
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23
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
|
CA
LIF
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24
P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
|
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CA
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Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
CA
LIF
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
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29
WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
iStock
|
CA
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30
copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
LUM
INA
TO
RS
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LIF
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33
Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
|
CA
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
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OC
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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OC
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
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LIF
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
CA
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
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NIA
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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NIA
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OC
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
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NIA
GR
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
RN
IA G
RO
CE
R |
55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
OR
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
If all candidates stood for primary election at the
same time with all voters choosing the top-two vote
getters for the general election regardless of party
open primary backers reasoned that candidates
would have to broaden their appeal to all voters in
a legislative district not to just the ldquotrue believersrdquo
who often decided primary elections The result
would be more moderate legislators be they
Democrat or Republican
This has been the case as
illustrated by the elections
of Republicans Catherine
Baker and David Hadley
in Assembly districts that
had elected Democrats in
previous election cycles Both
won due to their willingness
and ability to speak to voters from
both parties from the primary all the way
to the general election This would not have been
possible without open primaries
The open primary has not only changed the strategy
of candidates looking to enter the Legislature it
has also changed the way interest groups develop
strategies to elect legislators that best represent their
world views
Californiarsquos business interests have been particularly
savvy in adapting to these changes by adopting
strategies for supporting legislative candidates
that were once unheard of There was once a time
when it was automatic that these business interests
only backed Republican candidates This has
changed particularly in districts with a majority of
Democratic voters
In these districts it is not uncommon to see a
general election featuring two Democrats These
types of races provide a perfect synergy between
Democrats running from a more moderate position
and business interests who see a benefit from having
such political perspectives in the Legislature
This new breed of moderate Democrat would
have found it hard to advance out of a traditional
Democratic primary where the winner was decided
by the hard-core base
In the open primary system a moderate Democrat
can not only survive but thrive making it to the
general election by taking positions that appeal not
just to their fellow Democrats but to decline-to-state
and even moderate Republican voters
While remaining socially liberal like more
traditional Democrats moderates stand apart
by taking firm stances against new taxes and
unnecessary government regulation ndash two views
that align them with business interests
around the state
And the business community
has taken note spending
millions of dollars over the
past few years either in direct
donations to candidates
or the establishment of
political action committees
spending on behalf of
a candidate to elect more
moderate Democrats This has had
a big impact on the Legislature particularly in the
Assembly where the informal but highly influential
Moderate Caucus holds sway
Numbering anywhere from 10 to 15 depending on
who you ask and what is up for a vote on a particular
day this bloc of Democrats led by Assemblymembers
Rudy Salas from Bakersfield and Jim Cooper from
Sacramento have had considerable success helping
the business community in recent years by using
their influence to either water down legislation that
would adversely affect business preventing such
bills from being voted on by the full Assembly
or voting with Republicans to kill anti-business
legislation
Some notable business victories facilitated by the
Moderate Democrats during last yearrsquos legislative
DEM
REP
The open primary has not only changed the strateg y of candidates looking to enter the Legislature it has also changed the way interest groups develop strategies to elect legislators that best represent their world views
Continued from p 17
G O V E R N M E N T R E L AT I O N SCONTINUED
|
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G O V E R N M E N T R E L AT I O N S
session were the defeat of legislation that would
have required a 50 percent reduction in petroleum
use in motor vehicles the preventing of legislation
increasing the minimum wage from being heard on
the Assembly Floor and the preventing of legislation
requiring predictive scheduling from also being
heard on the Assembly Floor among others
Business groups such as CGA and others have
benefitted from supporting the candidacies of
these Moderate Democrats While their support
is certainly not 100 percent even their support 50
to 60 percent of the time is enough to stave off the
seemingly never-ending onslaught of legislation that
has the potential to put a damper on the business
climate in California
Those percentages may not seem like much but
when you consider that without open primaries the
Democrats coming from these same Democratic
majority districts would often stand with business
20 percent of the time or less the value of Moderate
Democrats to business is high
So while the middle of the road in Texas may be
nothing more than road kill armadillos and yellow
stripes the medians in California are wide berths
that provide a cushion for business from forces that
donrsquot necessarily have their best interests in mind
We must all do our part to keep that cushion in
place The election of Moderate Democrats whenever
possible is a great way to do so n
Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto
Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats
July 27-28 2016
Register today at
wwwfresnofoodexpocom
For more information contact
Amy Fuentes at 559-227-9999
or infofresnofoodexpocom
Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much
more than just a trade show The Fresno Food Expo is a celebration of Central
Californiarsquos vibrant food community and a showcase of our regionrsquos most
innovative food and beverage producers
Whether you are sourcing for fresh product deli baked goods or beer and wine
the Fresno Food Expo is your opportunity to connect with local trendsetters and
CEOrsquos behind some of the nationrsquos largest food companies right in their backyard
Come sit at our table and join us for an experience
you wonrsquot find anywhere else
Discover the abundance of Central Californiarsquos Food Region
FREE Buyer Registration
raquo Grower amp Manufacturer Site Tours
raquo VIP Event amp Opening Reception
raquo Buyerrsquos Breakfast
raquo Business to Business Trade Show
Your registration includes access to the following events
FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo
C A P I T O L I N S I D E R
Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program
Californiarsquos Beverage Container Recycling
Program was created by legislation 30 years ago
At that time recycling was a new word and the
intent of the program was to change
consumer habit Glass and aluminum
containers were sold with a surcharge
which the consumer would receive
back if they returned the containers
In that day and age people
commonly purchased six-packs
of glass soda bottles from
their grocery store They were
encouraged to bring those
glass containers back to the
store and exchange them
for the next six-pack they
purchased The convenience
of bringing containers back to
the store was the impetus for
the convenience zones created
by the law
At that time curbside recycling
didnrsquot exist nor were there
any real markets for recycled
material
Over the years a lot has
changed in California
Our communities are different
The definition of convenience
has changed Industries reliant
on manufacturing with recycled
materials have been born and are
thriving Most important we have
changed the Californiarsquos throw away culture to
one focused on recycling and reuse
Yet Californiarsquos Bottle Bill has failed to keep up
with the times
Today the perfect storm is brewing
A number of California communities are revolting
against convenience zone recyclers placing fees
and others obstacles before them in an
effort to keep them away
These recyclers while generating the
majority of containers returned through
the program attract patrons that many
community leaders and grocery store
customers prefer not to see in the
parking lot of their local grocery
store
Petroleum prices have driven the
scrap price for plastic to a historic
low making recycled content more
expensive than virgin product
In addition the formula Cal Recycle
uses to determine the overall cost
of recycling has failed to accurately
capture recent increases in minimum
wage and other cost factors These
three elements combined have made
it nearly impossible for convenience
zone recyclers to remain in business
This is evident by the announcement
from RePlanet the Statersquos largest
convenience zone recycler in late
January to decertify 200 locations in
Northern California
The decertification of convenience
zones starts a process for Cal Recycle
First they are required to review the zones
where each site was located They can either
choose to exempt the zone from further service
or change the status of the zone from served to
unserved
LOUIE BROWN
Partner in the
Sacramento office
of Kahn Soares and
Conway LLP
iStock
|
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C A P I T O L I N S I D E R
The decision to change a zone to unserved triggers an
announcement by Cal Recycle to all dealers in the zone
that they have 30 days to decide to take containers back
in the store or pay the $100 per day ldquoin lieurdquo fee
Cal Recycle is evaluating the zones impacted by the
decertification of RePlanet Since the number of
exempted zones is capped by statute it is expected Cal
Recycle will be forced to change the status on a large
number of zones to unserved and likely impact hundreds
of dealers in northern California This process is expected
to take the next 90 to 120 days to complete
In the meantime CGA and others are developing a
legislative strategy to address these issues before grocers
are required to take action Your legislative team is
focused on a comprehensive solution that takes the
grocer out of the position of the recycler of last resort
along with a number of other changes to bring the
program into 2016 n
iStock
CA
LIF
OR
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21
Dog chow n at u r a l plus vitamins amp minerals
is made with real chicken There ARE no artificial colors
and Yoshiloves itloves itloves it
I makeNO ARTIFICIALCOLORS OR PRESERVATIVES
MADEWITH Real Chicken
ldquo
rdquoBARBARA JDog Chow ProductionDavenport IA
I makeCOLORS OR PRESERVATIVES
New
Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA
reg
P E R S P E C T I V E
Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business
There are several proposed ballot measures that
may be on the November statewide ballot that
would make significant changes to Californiarsquos
minimum wage and tax laws This article takes
a brief look at the four competing tax increase
measures as well as two competing minimum
wage measures
COMPETING TAX INCREASE INITIATIVES FOR
2016 BALLOT
There are four competing tax increase measures
on this yearrsquos ballot They include
n A proposal by the California Hospital
Association and SEIU-UHW that would expand
and make permanent income tax increases
on Californiarsquos highest earners but also allow
Prop 30rsquos sales tax increase to expire in 2016
as scheduled
n A plan by SEIU-UHW and the California
Teachers Association that would extend the
income tax increases under Prop 30 until
2030 and would let the sales tax increase
expire in 2016 as scheduled
n A third measure would impose a significant
surcharge on property valued over $3 million
n A fourth measure would increase the tax on
tobacco products by $2 per pack
ldquoThe School Funding and Budget Stability Act
of 2016rdquo No 15-0065
This measure would extend until 112031 the
personal income tax rates established by Prop
30 and dedicate the funds entirely to schools
without the ability of the Legislature to suspend
or withhold funds even in a state budget crisis
The measure also exempts these funds from
the Statersquos Rainy Day Fund established by voters
in 2014 by Prop 2 (requiring a portion of state
revenues be allocated to the state budget reserve
and to paying down debt)
In Section 3 of the measure the following
statements of purpose and intent are set forth
ldquo(a) The chief purpose of this measure is to
protect our schools by temporarily extending
current income tax rates on wealthy
Californians instead of awarding a huge tax
break to couples earning more than half a
million dollars a year or individuals earning
more than a quarter million Instead of
sending money back into the pockets of the
wealthy this measure sends the money to a
special account that must be spent exclusively
on schools
ldquo(b) This measure is intended to keep California
on a track toward balanced budgets and
reliable funding for schools and community
colleges preventing a new round of
devastating cuts to public education and a
return to the days of chronic budget deficits
and funding cuts
ldquo(c) This measure guarantees in the Constitution
that the revenues it raises for schools will
be sent directly to school districts and
community colleges for classroom expenses
not administrative costs This school funding
cannot be suspended or withheld no matter
what happens with the state budgetrdquo
ldquoThe Invest in Californiarsquos Children Actrdquo
No 15-0070
This measure would make permanent the Prop
30 personal income tax rates after 2019 plus add
additional higher rates for those earning above
$1 million per year (individuals) or $2 million
(married filing jointly) with the highest bracket
of 143 percent and earmark the funds for
CHRIS MICHEL I
Legislative Advocate
Aprea amp Micheli Inc
Continued on p 24
CA
LIF
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23
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
|
CA
LIF
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24
P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
|
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26
CA
LIF
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27
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
CA
LIF
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
CA
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29
WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
iStock
|
CA
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30
copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
LUM
INA
TO
RS
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LIF
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33
Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
|
CA
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
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OC
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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OC
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
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LIF
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OC
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
CA
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
NIA
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
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NIA
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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NIA
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OC
ER
48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
OR
NIA
GR
OC
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
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NIA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
RN
IA G
RO
CE
R |
55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
OR
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
OR
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
CA
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G O V E R N M E N T R E L AT I O N S
session were the defeat of legislation that would
have required a 50 percent reduction in petroleum
use in motor vehicles the preventing of legislation
increasing the minimum wage from being heard on
the Assembly Floor and the preventing of legislation
requiring predictive scheduling from also being
heard on the Assembly Floor among others
Business groups such as CGA and others have
benefitted from supporting the candidacies of
these Moderate Democrats While their support
is certainly not 100 percent even their support 50
to 60 percent of the time is enough to stave off the
seemingly never-ending onslaught of legislation that
has the potential to put a damper on the business
climate in California
Those percentages may not seem like much but
when you consider that without open primaries the
Democrats coming from these same Democratic
majority districts would often stand with business
20 percent of the time or less the value of Moderate
Democrats to business is high
So while the middle of the road in Texas may be
nothing more than road kill armadillos and yellow
stripes the medians in California are wide berths
that provide a cushion for business from forces that
donrsquot necessarily have their best interests in mind
We must all do our part to keep that cushion in
place The election of Moderate Democrats whenever
possible is a great way to do so n
Editorrsquos note Aaron Moreno recently joined the California Grocers Association as Senior Director of Government Relations Moreno has more than 10 years experience in the California Legislature most recently as Legislative Director for Assemblymember Mike Gatto
Business groups such as CGA and others have benefitted from supporting the candidacies of these Moderate Democrats
July 27-28 2016
Register today at
wwwfresnofoodexpocom
For more information contact
Amy Fuentes at 559-227-9999
or infofresnofoodexpocom
Yoursquore invited to join us at this yearrsquos Fresno Food Expo We promise itrsquos much
more than just a trade show The Fresno Food Expo is a celebration of Central
Californiarsquos vibrant food community and a showcase of our regionrsquos most
innovative food and beverage producers
Whether you are sourcing for fresh product deli baked goods or beer and wine
the Fresno Food Expo is your opportunity to connect with local trendsetters and
CEOrsquos behind some of the nationrsquos largest food companies right in their backyard
Come sit at our table and join us for an experience
you wonrsquot find anywhere else
Discover the abundance of Central Californiarsquos Food Region
FREE Buyer Registration
raquo Grower amp Manufacturer Site Tours
raquo VIP Event amp Opening Reception
raquo Buyerrsquos Breakfast
raquo Business to Business Trade Show
Your registration includes access to the following events
FFE 160307 California Grocers Association Half Page Horizontal 7375rdquo x 4875rdquo
C A P I T O L I N S I D E R
Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program
Californiarsquos Beverage Container Recycling
Program was created by legislation 30 years ago
At that time recycling was a new word and the
intent of the program was to change
consumer habit Glass and aluminum
containers were sold with a surcharge
which the consumer would receive
back if they returned the containers
In that day and age people
commonly purchased six-packs
of glass soda bottles from
their grocery store They were
encouraged to bring those
glass containers back to the
store and exchange them
for the next six-pack they
purchased The convenience
of bringing containers back to
the store was the impetus for
the convenience zones created
by the law
At that time curbside recycling
didnrsquot exist nor were there
any real markets for recycled
material
Over the years a lot has
changed in California
Our communities are different
The definition of convenience
has changed Industries reliant
on manufacturing with recycled
materials have been born and are
thriving Most important we have
changed the Californiarsquos throw away culture to
one focused on recycling and reuse
Yet Californiarsquos Bottle Bill has failed to keep up
with the times
Today the perfect storm is brewing
A number of California communities are revolting
against convenience zone recyclers placing fees
and others obstacles before them in an
effort to keep them away
These recyclers while generating the
majority of containers returned through
the program attract patrons that many
community leaders and grocery store
customers prefer not to see in the
parking lot of their local grocery
store
Petroleum prices have driven the
scrap price for plastic to a historic
low making recycled content more
expensive than virgin product
In addition the formula Cal Recycle
uses to determine the overall cost
of recycling has failed to accurately
capture recent increases in minimum
wage and other cost factors These
three elements combined have made
it nearly impossible for convenience
zone recyclers to remain in business
This is evident by the announcement
from RePlanet the Statersquos largest
convenience zone recycler in late
January to decertify 200 locations in
Northern California
The decertification of convenience
zones starts a process for Cal Recycle
First they are required to review the zones
where each site was located They can either
choose to exempt the zone from further service
or change the status of the zone from served to
unserved
LOUIE BROWN
Partner in the
Sacramento office
of Kahn Soares and
Conway LLP
iStock
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C A P I T O L I N S I D E R
The decision to change a zone to unserved triggers an
announcement by Cal Recycle to all dealers in the zone
that they have 30 days to decide to take containers back
in the store or pay the $100 per day ldquoin lieurdquo fee
Cal Recycle is evaluating the zones impacted by the
decertification of RePlanet Since the number of
exempted zones is capped by statute it is expected Cal
Recycle will be forced to change the status on a large
number of zones to unserved and likely impact hundreds
of dealers in northern California This process is expected
to take the next 90 to 120 days to complete
In the meantime CGA and others are developing a
legislative strategy to address these issues before grocers
are required to take action Your legislative team is
focused on a comprehensive solution that takes the
grocer out of the position of the recycler of last resort
along with a number of other changes to bring the
program into 2016 n
iStock
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21
Dog chow n at u r a l plus vitamins amp minerals
is made with real chicken There ARE no artificial colors
and Yoshiloves itloves itloves it
I makeNO ARTIFICIALCOLORS OR PRESERVATIVES
MADEWITH Real Chicken
ldquo
rdquoBARBARA JDog Chow ProductionDavenport IA
I makeCOLORS OR PRESERVATIVES
New
Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA
reg
P E R S P E C T I V E
Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business
There are several proposed ballot measures that
may be on the November statewide ballot that
would make significant changes to Californiarsquos
minimum wage and tax laws This article takes
a brief look at the four competing tax increase
measures as well as two competing minimum
wage measures
COMPETING TAX INCREASE INITIATIVES FOR
2016 BALLOT
There are four competing tax increase measures
on this yearrsquos ballot They include
n A proposal by the California Hospital
Association and SEIU-UHW that would expand
and make permanent income tax increases
on Californiarsquos highest earners but also allow
Prop 30rsquos sales tax increase to expire in 2016
as scheduled
n A plan by SEIU-UHW and the California
Teachers Association that would extend the
income tax increases under Prop 30 until
2030 and would let the sales tax increase
expire in 2016 as scheduled
n A third measure would impose a significant
surcharge on property valued over $3 million
n A fourth measure would increase the tax on
tobacco products by $2 per pack
ldquoThe School Funding and Budget Stability Act
of 2016rdquo No 15-0065
This measure would extend until 112031 the
personal income tax rates established by Prop
30 and dedicate the funds entirely to schools
without the ability of the Legislature to suspend
or withhold funds even in a state budget crisis
The measure also exempts these funds from
the Statersquos Rainy Day Fund established by voters
in 2014 by Prop 2 (requiring a portion of state
revenues be allocated to the state budget reserve
and to paying down debt)
In Section 3 of the measure the following
statements of purpose and intent are set forth
ldquo(a) The chief purpose of this measure is to
protect our schools by temporarily extending
current income tax rates on wealthy
Californians instead of awarding a huge tax
break to couples earning more than half a
million dollars a year or individuals earning
more than a quarter million Instead of
sending money back into the pockets of the
wealthy this measure sends the money to a
special account that must be spent exclusively
on schools
ldquo(b) This measure is intended to keep California
on a track toward balanced budgets and
reliable funding for schools and community
colleges preventing a new round of
devastating cuts to public education and a
return to the days of chronic budget deficits
and funding cuts
ldquo(c) This measure guarantees in the Constitution
that the revenues it raises for schools will
be sent directly to school districts and
community colleges for classroom expenses
not administrative costs This school funding
cannot be suspended or withheld no matter
what happens with the state budgetrdquo
ldquoThe Invest in Californiarsquos Children Actrdquo
No 15-0070
This measure would make permanent the Prop
30 personal income tax rates after 2019 plus add
additional higher rates for those earning above
$1 million per year (individuals) or $2 million
(married filing jointly) with the highest bracket
of 143 percent and earmark the funds for
CHRIS MICHEL I
Legislative Advocate
Aprea amp Micheli Inc
Continued on p 24
CA
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23
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
|
CA
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P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
|
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CA
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Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
CA
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I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
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29
WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
iStock
|
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30
copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
LUM
INA
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RS
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33
Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
|
CA
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
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LIF
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
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GR
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
RN
IA G
RO
CE
R |
55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
C A P I T O L I N S I D E R
Trouble is Brewing With Californiarsquos Bottle Bill Over the years I have used this column to discuss the California Bottle Bill and legislative attempts to ldquofixrdquo it Each fix has served as nothing more than a band-aid providing short-term relief to cover over the true problems that exist with the program
Californiarsquos Beverage Container Recycling
Program was created by legislation 30 years ago
At that time recycling was a new word and the
intent of the program was to change
consumer habit Glass and aluminum
containers were sold with a surcharge
which the consumer would receive
back if they returned the containers
In that day and age people
commonly purchased six-packs
of glass soda bottles from
their grocery store They were
encouraged to bring those
glass containers back to the
store and exchange them
for the next six-pack they
purchased The convenience
of bringing containers back to
the store was the impetus for
the convenience zones created
by the law
At that time curbside recycling
didnrsquot exist nor were there
any real markets for recycled
material
Over the years a lot has
changed in California
Our communities are different
The definition of convenience
has changed Industries reliant
on manufacturing with recycled
materials have been born and are
thriving Most important we have
changed the Californiarsquos throw away culture to
one focused on recycling and reuse
Yet Californiarsquos Bottle Bill has failed to keep up
with the times
Today the perfect storm is brewing
A number of California communities are revolting
against convenience zone recyclers placing fees
and others obstacles before them in an
effort to keep them away
These recyclers while generating the
majority of containers returned through
the program attract patrons that many
community leaders and grocery store
customers prefer not to see in the
parking lot of their local grocery
store
Petroleum prices have driven the
scrap price for plastic to a historic
low making recycled content more
expensive than virgin product
In addition the formula Cal Recycle
uses to determine the overall cost
of recycling has failed to accurately
capture recent increases in minimum
wage and other cost factors These
three elements combined have made
it nearly impossible for convenience
zone recyclers to remain in business
This is evident by the announcement
from RePlanet the Statersquos largest
convenience zone recycler in late
January to decertify 200 locations in
Northern California
The decertification of convenience
zones starts a process for Cal Recycle
First they are required to review the zones
where each site was located They can either
choose to exempt the zone from further service
or change the status of the zone from served to
unserved
LOUIE BROWN
Partner in the
Sacramento office
of Kahn Soares and
Conway LLP
iStock
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C A P I T O L I N S I D E R
The decision to change a zone to unserved triggers an
announcement by Cal Recycle to all dealers in the zone
that they have 30 days to decide to take containers back
in the store or pay the $100 per day ldquoin lieurdquo fee
Cal Recycle is evaluating the zones impacted by the
decertification of RePlanet Since the number of
exempted zones is capped by statute it is expected Cal
Recycle will be forced to change the status on a large
number of zones to unserved and likely impact hundreds
of dealers in northern California This process is expected
to take the next 90 to 120 days to complete
In the meantime CGA and others are developing a
legislative strategy to address these issues before grocers
are required to take action Your legislative team is
focused on a comprehensive solution that takes the
grocer out of the position of the recycler of last resort
along with a number of other changes to bring the
program into 2016 n
iStock
CA
LIF
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21
Dog chow n at u r a l plus vitamins amp minerals
is made with real chicken There ARE no artificial colors
and Yoshiloves itloves itloves it
I makeNO ARTIFICIALCOLORS OR PRESERVATIVES
MADEWITH Real Chicken
ldquo
rdquoBARBARA JDog Chow ProductionDavenport IA
I makeCOLORS OR PRESERVATIVES
New
Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA
reg
P E R S P E C T I V E
Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business
There are several proposed ballot measures that
may be on the November statewide ballot that
would make significant changes to Californiarsquos
minimum wage and tax laws This article takes
a brief look at the four competing tax increase
measures as well as two competing minimum
wage measures
COMPETING TAX INCREASE INITIATIVES FOR
2016 BALLOT
There are four competing tax increase measures
on this yearrsquos ballot They include
n A proposal by the California Hospital
Association and SEIU-UHW that would expand
and make permanent income tax increases
on Californiarsquos highest earners but also allow
Prop 30rsquos sales tax increase to expire in 2016
as scheduled
n A plan by SEIU-UHW and the California
Teachers Association that would extend the
income tax increases under Prop 30 until
2030 and would let the sales tax increase
expire in 2016 as scheduled
n A third measure would impose a significant
surcharge on property valued over $3 million
n A fourth measure would increase the tax on
tobacco products by $2 per pack
ldquoThe School Funding and Budget Stability Act
of 2016rdquo No 15-0065
This measure would extend until 112031 the
personal income tax rates established by Prop
30 and dedicate the funds entirely to schools
without the ability of the Legislature to suspend
or withhold funds even in a state budget crisis
The measure also exempts these funds from
the Statersquos Rainy Day Fund established by voters
in 2014 by Prop 2 (requiring a portion of state
revenues be allocated to the state budget reserve
and to paying down debt)
In Section 3 of the measure the following
statements of purpose and intent are set forth
ldquo(a) The chief purpose of this measure is to
protect our schools by temporarily extending
current income tax rates on wealthy
Californians instead of awarding a huge tax
break to couples earning more than half a
million dollars a year or individuals earning
more than a quarter million Instead of
sending money back into the pockets of the
wealthy this measure sends the money to a
special account that must be spent exclusively
on schools
ldquo(b) This measure is intended to keep California
on a track toward balanced budgets and
reliable funding for schools and community
colleges preventing a new round of
devastating cuts to public education and a
return to the days of chronic budget deficits
and funding cuts
ldquo(c) This measure guarantees in the Constitution
that the revenues it raises for schools will
be sent directly to school districts and
community colleges for classroom expenses
not administrative costs This school funding
cannot be suspended or withheld no matter
what happens with the state budgetrdquo
ldquoThe Invest in Californiarsquos Children Actrdquo
No 15-0070
This measure would make permanent the Prop
30 personal income tax rates after 2019 plus add
additional higher rates for those earning above
$1 million per year (individuals) or $2 million
(married filing jointly) with the highest bracket
of 143 percent and earmark the funds for
CHRIS MICHEL I
Legislative Advocate
Aprea amp Micheli Inc
Continued on p 24
CA
LIF
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23
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
|
CA
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24
P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
|
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Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
CA
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NIA
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
CA
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WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
iStock
|
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30
copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
LUM
INA
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RS
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33
Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
|
CA
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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OC
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
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LIF
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
CA
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
LIF
OR
NIA
GR
OC
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
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OR
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
OR
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
LIF
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NIA
GR
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
OR
NIA
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OC
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
OR
NIA
GR
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
C A P I T O L I N S I D E R
The decision to change a zone to unserved triggers an
announcement by Cal Recycle to all dealers in the zone
that they have 30 days to decide to take containers back
in the store or pay the $100 per day ldquoin lieurdquo fee
Cal Recycle is evaluating the zones impacted by the
decertification of RePlanet Since the number of
exempted zones is capped by statute it is expected Cal
Recycle will be forced to change the status on a large
number of zones to unserved and likely impact hundreds
of dealers in northern California This process is expected
to take the next 90 to 120 days to complete
In the meantime CGA and others are developing a
legislative strategy to address these issues before grocers
are required to take action Your legislative team is
focused on a comprehensive solution that takes the
grocer out of the position of the recycler of last resort
along with a number of other changes to bring the
program into 2016 n
iStock
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21
Dog chow n at u r a l plus vitamins amp minerals
is made with real chicken There ARE no artificial colors
and Yoshiloves itloves itloves it
I makeNO ARTIFICIALCOLORS OR PRESERVATIVES
MADEWITH Real Chicken
ldquo
rdquoBARBARA JDog Chow ProductionDavenport IA
I makeCOLORS OR PRESERVATIVES
New
Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA
reg
P E R S P E C T I V E
Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business
There are several proposed ballot measures that
may be on the November statewide ballot that
would make significant changes to Californiarsquos
minimum wage and tax laws This article takes
a brief look at the four competing tax increase
measures as well as two competing minimum
wage measures
COMPETING TAX INCREASE INITIATIVES FOR
2016 BALLOT
There are four competing tax increase measures
on this yearrsquos ballot They include
n A proposal by the California Hospital
Association and SEIU-UHW that would expand
and make permanent income tax increases
on Californiarsquos highest earners but also allow
Prop 30rsquos sales tax increase to expire in 2016
as scheduled
n A plan by SEIU-UHW and the California
Teachers Association that would extend the
income tax increases under Prop 30 until
2030 and would let the sales tax increase
expire in 2016 as scheduled
n A third measure would impose a significant
surcharge on property valued over $3 million
n A fourth measure would increase the tax on
tobacco products by $2 per pack
ldquoThe School Funding and Budget Stability Act
of 2016rdquo No 15-0065
This measure would extend until 112031 the
personal income tax rates established by Prop
30 and dedicate the funds entirely to schools
without the ability of the Legislature to suspend
or withhold funds even in a state budget crisis
The measure also exempts these funds from
the Statersquos Rainy Day Fund established by voters
in 2014 by Prop 2 (requiring a portion of state
revenues be allocated to the state budget reserve
and to paying down debt)
In Section 3 of the measure the following
statements of purpose and intent are set forth
ldquo(a) The chief purpose of this measure is to
protect our schools by temporarily extending
current income tax rates on wealthy
Californians instead of awarding a huge tax
break to couples earning more than half a
million dollars a year or individuals earning
more than a quarter million Instead of
sending money back into the pockets of the
wealthy this measure sends the money to a
special account that must be spent exclusively
on schools
ldquo(b) This measure is intended to keep California
on a track toward balanced budgets and
reliable funding for schools and community
colleges preventing a new round of
devastating cuts to public education and a
return to the days of chronic budget deficits
and funding cuts
ldquo(c) This measure guarantees in the Constitution
that the revenues it raises for schools will
be sent directly to school districts and
community colleges for classroom expenses
not administrative costs This school funding
cannot be suspended or withheld no matter
what happens with the state budgetrdquo
ldquoThe Invest in Californiarsquos Children Actrdquo
No 15-0070
This measure would make permanent the Prop
30 personal income tax rates after 2019 plus add
additional higher rates for those earning above
$1 million per year (individuals) or $2 million
(married filing jointly) with the highest bracket
of 143 percent and earmark the funds for
CHRIS MICHEL I
Legislative Advocate
Aprea amp Micheli Inc
Continued on p 24
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23
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
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CA
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P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
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Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
CA
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
CA
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WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
iStock
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copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
LUM
INA
TO
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Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
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CA
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
OR
NIA
GR
OC
ER |
37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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OC
ER |
39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
CA
LIF
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NIA
GR
OC
ER
40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
LIF
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NIA
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OC
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
NIA
GR
OC
ER
46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
OR
NIA
GR
OC
ER |
47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
OR
NIA
GR
OC
ER
48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
Dog chow n at u r a l plus vitamins amp minerals
is made with real chicken There ARE no artificial colors
and Yoshiloves itloves itloves it
I makeNO ARTIFICIALCOLORS OR PRESERVATIVES
MADEWITH Real Chicken
ldquo
rdquoBARBARA JDog Chow ProductionDavenport IA
I makeCOLORS OR PRESERVATIVES
New
Trademarks owned by Socieacuteteacute des Produits Nestleacute SA Vevey Switzerland Printed in USA
reg
P E R S P E C T I V E
Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business
There are several proposed ballot measures that
may be on the November statewide ballot that
would make significant changes to Californiarsquos
minimum wage and tax laws This article takes
a brief look at the four competing tax increase
measures as well as two competing minimum
wage measures
COMPETING TAX INCREASE INITIATIVES FOR
2016 BALLOT
There are four competing tax increase measures
on this yearrsquos ballot They include
n A proposal by the California Hospital
Association and SEIU-UHW that would expand
and make permanent income tax increases
on Californiarsquos highest earners but also allow
Prop 30rsquos sales tax increase to expire in 2016
as scheduled
n A plan by SEIU-UHW and the California
Teachers Association that would extend the
income tax increases under Prop 30 until
2030 and would let the sales tax increase
expire in 2016 as scheduled
n A third measure would impose a significant
surcharge on property valued over $3 million
n A fourth measure would increase the tax on
tobacco products by $2 per pack
ldquoThe School Funding and Budget Stability Act
of 2016rdquo No 15-0065
This measure would extend until 112031 the
personal income tax rates established by Prop
30 and dedicate the funds entirely to schools
without the ability of the Legislature to suspend
or withhold funds even in a state budget crisis
The measure also exempts these funds from
the Statersquos Rainy Day Fund established by voters
in 2014 by Prop 2 (requiring a portion of state
revenues be allocated to the state budget reserve
and to paying down debt)
In Section 3 of the measure the following
statements of purpose and intent are set forth
ldquo(a) The chief purpose of this measure is to
protect our schools by temporarily extending
current income tax rates on wealthy
Californians instead of awarding a huge tax
break to couples earning more than half a
million dollars a year or individuals earning
more than a quarter million Instead of
sending money back into the pockets of the
wealthy this measure sends the money to a
special account that must be spent exclusively
on schools
ldquo(b) This measure is intended to keep California
on a track toward balanced budgets and
reliable funding for schools and community
colleges preventing a new round of
devastating cuts to public education and a
return to the days of chronic budget deficits
and funding cuts
ldquo(c) This measure guarantees in the Constitution
that the revenues it raises for schools will
be sent directly to school districts and
community colleges for classroom expenses
not administrative costs This school funding
cannot be suspended or withheld no matter
what happens with the state budgetrdquo
ldquoThe Invest in Californiarsquos Children Actrdquo
No 15-0070
This measure would make permanent the Prop
30 personal income tax rates after 2019 plus add
additional higher rates for those earning above
$1 million per year (individuals) or $2 million
(married filing jointly) with the highest bracket
of 143 percent and earmark the funds for
CHRIS MICHEL I
Legislative Advocate
Aprea amp Micheli Inc
Continued on p 24
CA
LIF
OR
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23
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
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OC
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24
P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
|
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26
CA
LIF
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OC
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27
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
CA
LIF
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
CA
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29
WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
iStock
|
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30
copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
LUM
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33
Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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GR
OC
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
CA
LIF
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
NIA
GR
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
OR
NIA
GR
OC
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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NIA
GR
OC
ER
48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
LIF
OR
NIA
GR
OC
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
OR
NIA
GR
OC
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
OR
NIA
GR
OC
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
RN
IA G
RO
CE
R |
55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
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Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
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ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
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Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
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Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
P E R S P E C T I V E
Competing Ballot Measures to Increase Taxes and WagesThis yearrsquos November ballot is shaping up to be one of significant importance to California grocers Grocers in California should be aware of the potential implications that any of these measures will have on their business
There are several proposed ballot measures that
may be on the November statewide ballot that
would make significant changes to Californiarsquos
minimum wage and tax laws This article takes
a brief look at the four competing tax increase
measures as well as two competing minimum
wage measures
COMPETING TAX INCREASE INITIATIVES FOR
2016 BALLOT
There are four competing tax increase measures
on this yearrsquos ballot They include
n A proposal by the California Hospital
Association and SEIU-UHW that would expand
and make permanent income tax increases
on Californiarsquos highest earners but also allow
Prop 30rsquos sales tax increase to expire in 2016
as scheduled
n A plan by SEIU-UHW and the California
Teachers Association that would extend the
income tax increases under Prop 30 until
2030 and would let the sales tax increase
expire in 2016 as scheduled
n A third measure would impose a significant
surcharge on property valued over $3 million
n A fourth measure would increase the tax on
tobacco products by $2 per pack
ldquoThe School Funding and Budget Stability Act
of 2016rdquo No 15-0065
This measure would extend until 112031 the
personal income tax rates established by Prop
30 and dedicate the funds entirely to schools
without the ability of the Legislature to suspend
or withhold funds even in a state budget crisis
The measure also exempts these funds from
the Statersquos Rainy Day Fund established by voters
in 2014 by Prop 2 (requiring a portion of state
revenues be allocated to the state budget reserve
and to paying down debt)
In Section 3 of the measure the following
statements of purpose and intent are set forth
ldquo(a) The chief purpose of this measure is to
protect our schools by temporarily extending
current income tax rates on wealthy
Californians instead of awarding a huge tax
break to couples earning more than half a
million dollars a year or individuals earning
more than a quarter million Instead of
sending money back into the pockets of the
wealthy this measure sends the money to a
special account that must be spent exclusively
on schools
ldquo(b) This measure is intended to keep California
on a track toward balanced budgets and
reliable funding for schools and community
colleges preventing a new round of
devastating cuts to public education and a
return to the days of chronic budget deficits
and funding cuts
ldquo(c) This measure guarantees in the Constitution
that the revenues it raises for schools will
be sent directly to school districts and
community colleges for classroom expenses
not administrative costs This school funding
cannot be suspended or withheld no matter
what happens with the state budgetrdquo
ldquoThe Invest in Californiarsquos Children Actrdquo
No 15-0070
This measure would make permanent the Prop
30 personal income tax rates after 2019 plus add
additional higher rates for those earning above
$1 million per year (individuals) or $2 million
(married filing jointly) with the highest bracket
of 143 percent and earmark the funds for
CHRIS MICHEL I
Legislative Advocate
Aprea amp Micheli Inc
Continued on p 24
CA
LIF
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23
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
|
CA
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P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
|
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Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
CA
LIF
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
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29
WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
iStock
|
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30
copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
LUM
INA
TO
RS
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33
Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
|
CA
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
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OC
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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OC
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
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LIF
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
CA
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
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NIA
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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NIA
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OC
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
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NIA
GR
OC
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
RN
IA G
RO
CE
R |
55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
OR
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
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IFO
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
education (including preschool and child care as well
as CSU and UC systems) and healthcare
This measure would extend the Prop 30 personal
income tax rates after 2019 plus add an additional
amount for those earning above $1 million per year
with the highest bracket of 143 percent and earmark
the funds for education (including preschool and child
care) and healthcare
Among the numerous intent statements found in
Section 1 of this measure are the following
ldquo(q) The Invest in Californiarsquos Children Act continues
voter approved taxes on Californians earning more
than $290000 a year while also imposing new and
modest taxes on earnings in excess of $1 million per
year These funds will support education healthcare
childcare and preschool
ldquo(r) The Invest in Californiarsquos Children Act also makes
Californiarsquos tax rates fairer If voter approved taxes
on those earning more than $290000 a year expire
as scheduled in 2018 a millionaire will pay the same
marginal income tax rate as an individual making
$57000 a year
ldquo(s) Under The Invest in Californiarsquos Children Act all tax
revenue from this Act is guaranteed to go directly to
education healthcare child care and preschoolrdquo
ldquoLifting Children and Families out of Poverty Actrdquo
No 15-0043
This measure would impose an additional surcharge
on real property with an assessed value of over $3
million The surcharge would be based upon a sliding
scale ranging from 310 of 1 percent for real property
assessed at $3 million to 810 of 1 percent for real
property assessed at $10 million or more The revenue
raised would be allocated to numerous programs
designed to reduce poverty including prenatal services
expanded childcare early childhood education after-
school and summer programs job training grants tax
credits and monetary aid The surcharge would be in
effect for 20 years The LAO estimates increased state
revenues of $6-7 billion annually
California Healthcare Research and Prevention
Tobacco Tax Act of 2016
This measure would impose an additional tax of 100
mills for each cigarette distributed and would apply an
equivalent amount to other tobacco products as well
as electronic cigarettes As a result the cigarette tax
would be increased by $2 per pack There would also
be a floor stock tax for each cigarette The measure
is estimated to raise in excess of $11 billion annually
These additional funds raised would be dedicated
to healthcare as well as research and prevention of
tobacco use
COMPETING MINIMUM WAGE INITIATIVES PROPOSED
FOR 2016 BALLOT
The first of these two measures proposes raising the
statewide minimum wage to $15 per hour The second
measure proposes raising the statewide minimum wage
to $15 per hour as well as increasing paid sick leave to
6 days per year
Existing law raises the statewide minimum wage to
$10 per hour on Jan 1 2016 The cities of Los Angeles
Oakland and Berkeley have approved increases to $15
per hour (currently there are 14 local jurisdictions with a
higher minimum wage than $9)
Senate Bill 3 (Leno) would raise the statewide minimum
wage to $13 per hour by 2018 that measure was held
on the Assembly Appropriations Committeersquos Suspense
File Based on household surveys the Legislative
Analystrsquos Office estimates that roughly one-quarter of
California workers ndash currently estimated at 4 million
people ndash make less than $13 per hour Occupations
with large numbers of low-wage workers include food
preparation and service building and grounds cleaning
and maintenance and retail sales
According to the LAO workers in inland California
generally receive lower wages than workers in the
statersquos coastal areas (eg median wages in San
Francisco and San Jose are more than 50 percent higher
than median wages in Fresno and Bakersfield
In May 2015 Californiarsquos statewide unemployment rate
was close to 6 percent but a few coastal counties had
unemployment rates below 4 percent In contrast a
dozen counties ndash all in the inland part of the state ndash had
unemployment rates above 9 percent
The two initiatives include
Service Employees International Union State Council
(the statersquos largest union)
n Raises the minimum wage to $15 an hour by 2020
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
P E R S P E C T I V E
Continued from p 23
Continued on p 26
|
CA
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24
P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
|
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26
CA
LIF
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Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
CA
LIF
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
CA
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WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
iStock
|
CA
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copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
LUM
INA
TO
RS
CA
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Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
|
CA
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
OR
NIA
GR
OC
ER |
37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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OC
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
CA
LIF
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OC
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
LIF
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NIA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
NIA
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OC
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
OR
NIA
GR
OC
ER |
47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
OR
NIA
GR
OC
ER
48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
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IFO
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
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Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
P E R S P E C T I V E
n Requires at least six paid sick days a year
This initiative will have $20-30 million in campaign
funding from the State Council
SEIU United Healthcare Workers West
n Raises the minimum wage to $15 an hour by 2021
($11 on 1117 $12 on 1118 $13 on 1119 $14 on
1120 and $15 on 1121)
n Thereafter the amount is adjusted annually based
on the rate of inflation of the prior year by using the
California CPI
This initiative has been endorsed by California Lt Gov
Gavin Newsom In addition it has already collected the
366000 signatures needed to qualify
Californiarsquos November statewide ballot could have as
many as two dozen measures What impact that will
have on the electorate remains to be seen Among
those that have already qualified for the November 8
ballot include
n Referendum to overturn Californiarsquos law banning
single-use plastic bags in grocery stores
n Initiative measure targeting hospital fees and
Medi-Cal matching funds from federal government
by requiring 23 vote of the Legislature to amend
hospital quality assurance fees
n Initiative measure on school bonds funding for
K-12 school and community college facilities in the
amount of $9 billion would divide the money as
follows $3 billion for new K-12 school construction
$3 billion for K-12 school modernization $1 billion
for charter schools and vocational education centers
and $2 billion for community colleges
n Initiative measure to require statewide voter approval
before any revenue bones can be issued or sold by
the state for projects exceeding $2 billion
n Initiative measure to require performers in adult films
to use condoms during filming n
Continued from p 24
We join the California Grocers Association in congratulating Gelsonrsquos Rob McDougall and Donna Tyndall for their induction into
CGA Educational Foundation Hall of Achievement
Happiness lies in the joy of achievement
and the thrill of creative effort
Franklin D Roosevelt
|
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CA
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Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
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LIF
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
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29
WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
iStock
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30
copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
LUM
INA
TO
RS
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33
Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
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CA
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
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LIF
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
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Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
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NIA
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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NIA
GR
OC
ER
48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
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GR
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
RN
IA G
RO
CE
R |
55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
OR
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
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OR
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
RN
IA G
RO
CE
R
66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
CA
LIF
OR
NIA
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27
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
Se
lec
t th
e B
est
reg
Contact us today to learn how we can help make this your best year ever
SUSTAINABILITYFor nearly 100 years we have been taking care of our customers while also
caring for our planet Our company-wide waste reduction recycling and energy-efciency measures are central to the way we do business
Eric Pearlman Dir Independent Sales WC 19163734286 wwwcswgcom
The annual impact of our sustainability efforts is adding up bull 421000000 gallons of water saved bull 1100000 cubic feet of landll space preserved bull 350000 kilowatt hours eliminated bull 529000 trees protected
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
CA
LIF
OR
NIA
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
CA
LIF
OR
NIA
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OC
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29
WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
iStock
|
CA
LIF
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NIA
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30
copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
LUM
INA
TO
RS
CA
LIF
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NIA
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OC
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33
Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
|
CA
LIF
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
OR
NIA
GR
OC
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
CA
LIF
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NIA
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OC
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
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OR
NIA
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
OR
NIA
GR
OC
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
OR
NIA
GR
OC
ER
48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
LIF
OR
NIA
GR
OC
ER |
51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
OR
NIA
GR
OC
ER
52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
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CA
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
Jennifer Hatcher Senior Vice President
Government and Public Affairs Food Marketing Institute
INS
IDE
TH
E B
ELT
WA
Y
POS Credit Card Fraud Escalates Post EMV ndash Best PracticesNORMALLY THE FOOD MARKETING INSTITUTE ELECTRONIC PAYMENT SYSTEMS
COMMITTEE IS FULL OF CREATIVE IDEAS AND SURE THEY CAN TACKLE ANYTHING
PRESENTED TO THEM BUT THE LATEST ESCALATION OF CHARGE BACKS ON CREDIT THAT
OUR EXPERTS PUT AT A 400-1000 INCREASE OVER 2015 NUMBERS HAD THEM STUMPED
We reached out to law enforcement reached out
to congressional committees reached out to the
card associations and reached out to asset
protection experts
We put the best ideas of the group together and
offered the following advice and a webpage where
we can add additional ideas suggestions tips and
encouragement to get this problem under control
The first step is understanding the scope of problems
you are experiencing as there seem to be a couple
of different problems Some of our folks are seeing
what we are calling ldquoorganized crimerdquo
When a card is used 100 times in your store(s) in a
couple of days that is organized crime and clearly
there are multiple people involved in this fraud
On the other hand when one individual uses a card
in your store and then tells their credit card company
that they were not in the store and did not buy the
products that is still a crime you are still out the
money but at least for now it seems to be the work
of one person attempting to take advantage of a bad
system or bad issuers happy to charge back and ask
questions later because of their ldquozero liabilityrdquo
This term ldquoorganized crimerdquo ndash is clearly not based
on a legal definition just a recognition that there
is clearly more than one type of problem we are
seeing simultaneously
Getting a handle on the problem
n Track your chargeback rates and work to identify
where your greatest vulnerabilities are in the store
n Coordinate with local law enforcement and ask
for any trends they may see that could be the work
of an organized criminal element Share your
experience with them
n Fraudulent transactions are a crime so ask law
enforcement how and when they may suggest you
file a police report for chargebacks resulting from
fraudulent transactions and any terminology you
should use if you believe a particular chargeback
may be linked to others
Putting in-store controls in place
Gift cards are a prime target for criminals for
a number of reasons A person can buy a high
denomination gift card they are lightweight and easy
to transport and they are easily sold on the Internet
Several FMI members have taken steps to mitigate
this risk using one or more of these approaches
n Moving the card-branded gift cards that can be
used in any store behind customer service
n Restricting selling high value gift cards to certain
hours of the day (example 6amndash10pm)
n Only allowing cash or PIN-enabled debit cards for
the purchase of gift cards
n Requiring a photo ID for gift card transactions
n Removing gift cards from self-checkout lanes
n Setting up a point of sale system prompt for
managersrsquo approval for gift card transactions above
a certain dollar amount
n Not allowing purchase of gift cards with a prepaid
or reloadable Visa American Express MasterCard
or Discover card
n Limiting the value andor the number of gift cards
that can be purchased in a single transaction or on
a single card in a certain period of time
|
CA
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28
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
CA
LIF
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29
WA
SH
ING
TO
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EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
iStock
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30
copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
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33
Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
LIF
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NIA
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OC
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
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OR
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
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NIA
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
OR
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
OR
NIA
GR
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
I N S I D E T H E B E LT WAY
Looking Beyond Gift Card Fraud to All Credit Transactions
We are seeing fraud now well beyond gift card fraud
You may want to put additional precautions in place
for any credit card transaction
n If you are testing EMV in-store and have a register
running EMV direct all gift card high value
or questionable transactions through that lane
This could significantly lower your chargeback
exposure
n Require a 100 ID check on all credit card
transactions or ID over a certain dollar value or
ID on any customer not using a loyalty card If
you can say that you check ID 100 of the time or
can link a transaction that was charged back by a
customer who presented a loyalty card or is shown
via camera to be in the store purchasing products
at the time of the transaction your ability to fight a
chargeback is greatly enhanced
n Post signage at the POS explaining this fraud and
your response to combatting fraud and protecting
your customers and your intent to involve law
enforcement The sign alone may be enough to
move the criminal to another location Plus it cuts
down on time your cashier has to explain why they
are asked for ID and the customer in front of them
using a PIN debit card was not asked for ID
n Some companies have added address verification
system (AVS) to their credit card processing As
frequently seen at gas pumps it prompts the
customer to enter their 5-digit zip code at the point
of sale If they get a mismatch they have trained
all cashiers to ask for ID
n Prohibit manual entry if the magnetic stripe does
not work or send that transaction to a customer
service desk for more scrutiny
n Implement CVV verification on manually entered
credit transactions or all credit transactions
n A managerrsquos override on any large order (over
$1000) An order at a grocery store for more than
$1000 (unless you know the customer and the
reason for the transaction ndash hosting a large party
catererrestaurant owner) should cause immediate
concernscrutiny
n ID check and transaction amount limits per
customer and per day to help mitigate risk
Members are reporting cards that have been used
more than 100 times in stores in 2 days You
need to have a mechanism in
place to make sure this type
of ldquoorganized crimerdquo does not
happen to you
Remain vigilant against any kind of suspicious activity such as
n Guestcustomer attempting
multiple credit cards with
declines
n Guest has a stack of credit cards
visible and outside of wallet
n Pay close attention to cards
issued by international banks in
Asia and the Middle East etc
n Buying large quantities of open
value gift cards
n Buying large quantities of beer
or wine
n When asking for ID the customer becomes
agitated nervous or in a hurry
In response to our requests both Visa and
MasterCard have offered more specific information
available on our web page
FMI EMV Chargeback Page
httpwwwfmiorgemv-credit-chargebacks-best-practices-and-guidance
Bottom line you are certainly not the only
supermarket being defrauded but be aware be
vigilant be prepared and share what you learn
In considering any actions you need to consult
your contracts and the operating rules of the card
associations n
We are seeing fraud now well beyond gift card fraud You may want to put additional precautions in place for any credit card transaction
Why am I asked for ID on credit transactions
The supermarket industry has seen an extraordinary level of fraud on credit card transactions in the last several months on both chip and magnetic stripe cards In an effort to keep your information safe and keep our prices low we are asking for your ID to confirm your identity on a credit card transaction We are not experiencing fraud with PIN debit or PIN credit so if you insert a PIN you will not be asked for ID We are working closely with law enforcement and are filing police reports when fraudulent transactions occur
CA
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29
WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
iStock
|
CA
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30
copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
LUM
INA
TO
RS
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LIF
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33
Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
|
CA
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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OC
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
CA
LIF
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
CA
LIF
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
LIF
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
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NIA
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OC
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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NIA
GR
OC
ER
48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
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GR
OC
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
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GR
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
RN
IA G
RO
CE
R |
55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
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GR
OC
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
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LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
RN
IA G
RO
CE
R
66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
GR
OC
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
WA
SH
ING
TO
N R
EP
OR
T
Peter J LarkinPresident and CEO National Grocers
Association
Challenges Continue for EMV ImplementationTHE ONGOING TRANSITION FROM MAGNETIC STRIPE TO EUROPAY MASTERCARD AND VISA
KNOWN AS EMV HAS GATHERED MUCH ATTENTION FROM BOTH BUSINESS OWNERS AND
CONSUMERS AND ALTHOUGH THE OCTOBER 1 LIABILITY SHIFT DEADLINE IS BEHIND US
MERCHANTS STILL CONTINUE TO FACE CHALLENGES ON THE ROAD TO IMPLEMENTATION
Not a day goes by that I donrsquot hear from NGA
members who are beyond frustrated with the slow
pace of EMV implementation
To be clear the vast majority
of NGArsquos members ndash from
single-store operators to
regional chains ndash invested
tens of thousands of dollars
in new hardware and
software well before the
October 1 shift only to be
left waiting on a massive
backlog in the certification
process which is controlled
by the card networks
As an example NGA has one retail member who
installed EMV capable hardware in its 70-plus stores
well over a year before the October 1 deadline and
yet continue to wait on certifications so it can begin
accepting EMV cards Meanwhile these retailers are
being hit with thousands of dollars in chargebacks
from the banks and card networks simply because
they are not ldquoEMV compliantrdquo
We understand that the certification process which
is mandated by the card networks has experienced a
number of delays that range from the card networksrsquo
late delivery of technical code to other complications
slowing the certification process
None of these delays are the fault of merchants yet
itrsquos the merchant who is facing an onslaught in new
chargebacks as well as confusion among consumers
who donrsquot understand why they canrsquot use their chip
cards at their local supermarket
While some people may feel that EMV technology
is more secure for consumers the reality is the chip
has one main purpose and that is to validate the
authenticity of the card at the point of purchase
making it more difficult to counterfeit the card
Unfortunately the vast majority of EMV credit cards
being issued by banks in the United States are being
issued without PINs which raises the question why
go to all the expense to
issue EMV cards without
adding a simple PIN
authentication as well
Many independent
supermarkets are
investing in advanced
technology such as
tokenization and end
to end encryption to
further protect the
consumerrsquos data from
the swipe on through the transaction processing
Some are even making further investments to protect
consumer data with products such as First Datarsquos
TransArmorreg Solution ndash the same technology that
secures Apple Pay ndash to offer an added layer of security
Merchants who have made the investment to
comply with the October 1 deadline should be given
a ldquosafe harborrdquo and shielded from EMV specific
chargebacks NGA has reached out to Visa and
MasterCard leadership to open a dialogue in regard
to the significant backlog in the EMV certification
process and the increased number of chargebacks
to merchants
NGA is also working to educate federal policymakers
on the challenges merchants have faced during this
transition period
Itrsquos time for the card networks and banks to stop
passing the buck onto the backs of merchants but
rather they should work together with merchants to
further eliminate fraud by issuing credit cards with
PINs work to speed up the EMV certification process
and put a hold on chargebacks n
iStock
|
CA
LIF
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30
copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
E IL
LUM
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TO
RS
CA
LIF
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33
Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
|
CA
LIF
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
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OC
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
OR
NIA
GR
OC
ER |
39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
CA
LIF
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OC
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
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CA
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OR
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
CA
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
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GR
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
OR
NIA
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OC
ER |
47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
OR
NIA
GR
OC
ER
48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
LIF
OR
NIA
GR
OC
ER |
51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
OR
NIA
GR
OC
ER
52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
OR
NIA
GR
OC
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
RN
IA G
RO
CE
R |
55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
OR
NIA
GR
OC
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
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LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
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CA
LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
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WIT
Hhellip
|
CA
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
RN
IA G
RO
CE
R
66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
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OC
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
copy2011 The Coca-Cola Company ldquoCoca-Colardquo ldquoopen happinessrdquo and the Contour Bottle are registered trademarks of The Coca-Cola Company
Untitled-1 1 33016 1003 AM
TH
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33
Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
|
CA
LIF
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
OR
NIA
GR
OC
ER |
39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
CA
LIF
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OC
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
NIA
GR
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
OR
NIA
GR
OC
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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NIA
GR
OC
ER
48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
LIF
OR
NIA
GR
OC
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
OR
NIA
GR
OC
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
OR
NIA
GR
OC
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
RN
IA G
RO
CE
R |
55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
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LIF
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
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CA
LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
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WIT
Hhellip
|
CA
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
RN
IA G
RO
CE
R
66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
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OC
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
Untitled-1 1 33016 1003 AM
TH
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33
Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
|
CA
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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NIA
GR
OC
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
CA
LIF
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
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OR
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
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NIA
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OC
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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NIA
GR
OC
ER
48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
LIF
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NIA
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OC
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
OR
NIA
GR
OC
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
OR
NIA
GR
OC
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
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WIT
Hhellip
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CA
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
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OC
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
TH
E IL
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RS
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33
Meet Illuminators Headlite Dave Dimond HISTORY TRADITION AND SERVICE TO FAMILY FRIENDS AND THE INDUSTRY HAVE BEEN THE
CENTERPIECES OF DAVE DIMONDrsquoS LIFE AND CAREER ndash QUALITIES THAT WILL ALSO MARK HIS
TENURE AS THIS YEARrsquoS ILLUMINATORS HEADLITE
Dave Dimond Senior Vice President of Sales at Miltonrsquos Baking Company in Carlsbad Calif started his career in the bakery business just after he graduated high school as a vacation relief driver for Thomasrsquo English Muffins
When he got married at 19 his father-in-law then a route sales rep for Oroweat convinced him that a career in the grocery industry was the best way
to make an honest living and take care of his future family
He took that advice to heart and started knocking on doors
ldquoThomasrsquo was the first to give me a shotrdquo he recalls ldquoI worked my way
through the ranks to supervisor district manager then to account executive I was doing that when Thomasrsquo bought Oroweat So I have pretty deep roots in the businessrdquo
It was also a place where personal relationships blossomed He met his future wife Andrea at Thomasrsquo when he was a single father raising three kids
ldquoItrsquos been a great time a challenging and interesting business and having someone who understands that has sure helpedrdquo he says
Dimondrsquos association with The Illuminators goes back to the mid-1990s when he was with Four-S an independent bakery in Southern California
The president of the company wanted to support a hospitality suite at the Western Association of Food Chains convention and asked that I manage the eventrdquo he recalls ldquoI saw then the value of being involved and supporting the organization When I began working for Miltonrsquos they were anxious to offer the same support and Irsquove been involved with the Illuminators ever since
As the incoming Headlite being the custodian of the organizationrsquos history and traditions is important
ldquoAt the same time we have to be relevant and adaptrdquo Dimond says ldquoThis is what will keep the organization healthy in the years to come I like to think Irsquove done that with my own family and doing the same for my Illuminator family will give me a great sense of accomplishmentrdquo
An important aspect in this never-ending journey is communicating to the next generation the value of getting involved and the tremendous return on investment in terms of relationships
ldquoSome in the younger generation might not see the valuerdquo Dimond says ldquoBut the friendships Irsquove formed in this business run deep as a direct result of my involvement with the Illuminatorsrdquo
The incoming Headlite says that if he can get people to do what he has done for over 20 years hersquos convinced they will see the benefits of upholding this tradition and kinship with a special group of volunteers
Dave gives it his all during The Illuminators Special Event
Dave with his wife Andrea
Untitled-1 1 33016 1003 AM
Continued on p 34
Continued from p 33
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CA
LIF
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
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LIF
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
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LIF
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
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NIA
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OC
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
OR
NIA
GR
OC
ER
48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
LIF
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NIA
GR
OC
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
OR
NIA
GR
OC
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
OR
NIA
GR
OC
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
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CA
LIF
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OC
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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IA G
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66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
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OC
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
Continued from p 33
|
CA
LIF
OR
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34
Part of that is getting to see the organization as fun and not just hard work
ldquoIn the old days we had badminton committees diving contests lawn bowling and croquet in addition to the golf tournaments we do todayrdquo Dimond says ldquoThe intent was to foster better relationships and wersquoll continue trying to make sure events on the calendar are as enjoyable as they can berdquo
Dimond says The Illuminators is a great organization to be a part of particularly for anyone seeking to build a career in the grocery industry
ldquoThe Illuminators give you the opportunity to have access to senior leadership throughout the grocery businessrdquo he says ldquoItrsquos a great opportunity to get to know people you might not ordinarily know That only comes from hard work and really putting yourself out thererdquo
That said Dimond believes younger people have a lot to contribute to the organization
ldquoOur Officer and Hilite team will continue to bring in new energy and add to whatrsquos been done over the yearsrdquo he notes
Dimond says the challenge is trying to have enough events that make the Illuminators relevant without it becoming overkill
ldquoWe have great support from many many executive leaders in the food industryrdquo he says ldquoThey understand and appreciate what the Illuminators do The industry calendar is pretty full with a lot of great causes people want to be involved inrdquo
The key Dimond says is to ldquoremain relevant in order to keep people interestedrdquo
This doesnrsquot seem to be an issue ldquoWersquore looking for record attendance at this yearrsquos WAFC Convention in Hawaiirdquo Dimond notes ldquoWersquore also adding additional events like Town Halls and QampA sessions with many retailersrdquo
The Illuminators will have a committee overseeing these events along with the Food Industry Management students from USC
ldquoSo I guess wersquore doing something rightrdquo Dimond muses ldquoYet therersquos always room for improvement and the only way to grow is by listening and working with those ideas and suggestions to make positive change Thatrsquos what Irsquom going to do because we have a lot of people on the board with great ideasrdquo
Dimond says these events enables The Illuminators Educational Foundation to offer more than $100000 in scholarships last year
ldquoThe goal is to increase this amount annually so that we can offer more scholarshipsrdquo he says ldquoWe can only do this based on support from the grocery industry and the senior leadership which supports the Illuminatorsrdquo
At present The Illuminators have two networking events on its calendar In May The Illuminators are sponsoring a networking dinner featuring a keynote address by Donna Giordano President Ralphs Grocery Co
ldquoWersquove also locked up an event with Grocery Outlet in late Julyrdquo Dimond added In addition the supplier group is a strong supporter of the CGA Educational Foundation Golf Classics and WAFC rallies
On top of this itrsquos rare to find an Illuminator thatrsquos not involved in other organizations like the City of Hope Cystic Fibrosis Olive Crest and The Childrenrsquos Miracle Network Dimond is no exception and hersquos rolled up his sleeves for many of these organizations over the years
Last year he was a recipient of the Humanitarian Award from the California Conference for Equality and Justice
ldquoItrsquos very humbling to get recognized for giving back and just doing what yoursquore raised to dordquo Dimond says ldquoI hope to do the same thing as Illuminator Headliterdquo n
T H E I L L U M I N AT O R S
Dave with teammate Kevin Konkel Raleyrsquos
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
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37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
OR
NIA
GR
OC
ER |
39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
CA
LIF
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NIA
GR
OC
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
NIA
GR
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
OR
NIA
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OC
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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NIA
GR
OC
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
LIF
OR
NIA
GR
OC
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
OR
NIA
GR
OC
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
OR
NIA
GR
OC
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
RN
IA G
RO
CE
R |
55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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OC
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
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OC
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
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OC
ER
64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
RN
IA G
RO
CE
R
66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
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NIA
GR
OC
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CA
LIF
OR
NIA
GR
OC
ER |
37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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GR
OC
ER |
39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
CA
LIF
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OC
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
CA
LIF
OR
NIA
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
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NIA
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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NIA
GR
OC
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
RN
IA G
RO
CE
R |
55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
OR
NIA
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OC
ER
56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
OR
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OC
ER
64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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NIA
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OC
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
RN
IA G
RO
CE
R
66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
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NIA
GR
OC
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
CA
LIF
OR
NIA
GR
OC
ER |
37
copy2014 Bimbo Bakeries USA Inc All rights reserved
BIMBO BAKERIES USA
THANKS JIM FRENCH FOR HIS DEDICATION IN 2015
AS OUR ILLUMINATOR HEADLITE
ampWELCOMES DAVE DIMOND
OUR INCOMING HEADLITE AS HE CONTINUES TO ldquoSPREAD THE LITE OF GOOD FELLOWSHIPrdquo
IN 2016
BimboBakeriesUSAcom
bb2016_r6indd 1 33016 1131 AM
CONGRATULATIONS DAVE DIMONDon being named the 2016-2017 Illuminator Headlite
THIS ADVERTISEMENT
PREPARED BY
enCore Marketing LLC
Client Domino Foods Job DM2016-2413 Ad 2494
Media CA Grocers Issue Issue 2 Ad Size live 7125rdquox4625 trim 7375rdquo x 4875rdquo
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
OR
NIA
GR
OC
ER |
39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
CA
LIF
OR
NIA
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OC
ER
40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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NIA
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OC
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
CA
LIF
OR
NIA
GR
OC
ER |
43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
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NIA
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
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GR
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
RN
IA G
RO
CE
R |
55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
OR
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
RN
IA G
RO
CE
R
66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
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OC
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
Therersquos still a major need for retailers to achieve economies of scaleespecially as they face specialist competition that has a much lower cost base
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
LIF
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NIA
GR
OC
ER |
39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
CA
LIF
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NIA
GR
OC
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
LIF
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NIA
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OC
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
NIA
GR
OC
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
LIF
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
OR
NIA
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OC
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
OR
NIA
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple ndash economic fundamentals are sound the need to acquire expertise and distribution is essential and there are plenty of strong regional chains and independents looking to wed
ldquoTherersquos a lot of interest in the grocery sectorrdquo said Brian Todd president of The Food Institute ldquoPrivate equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new Some are just looking for a safe haven for cash
ldquoMeanwhile some family owned chains especially third- or fourth generations are looking to cash outrdquo he adds ldquoAlso grocery is seen as a lot sexier business than it used to berdquo
Joel Rampoldt retail and consumer lead for KPMG Strategy noted ldquoTherersquos still a major need for retailers to achieve economies of scale especially as they face specialist competition that has a much lower cost base The ability to spread out things like distribution marketing and sourcing costs and SGampA across a broader perimeter is imperativerdquo
His comments underscore KPMGrsquos 10th annual survey focusing on the outlook for MampA activity across a wide variety of industries this year
The executive survey conducted in partnership with FORTUNE anticipates an acceleration of MampA
activity this year and an increase in the average deal size The average value per acquisition will be less than $250 million according to 52 percent of respondents
While not focused strictly on retailing the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year And the vast majority of deals will be in the US given the relatively strong economic outlook
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in MampA activity this year
The need to get bigger in new markets is not necessarily driving MampA at retail according to Rampoldt
ldquoItrsquos about elevating capabilitiesrdquo he says ldquoWhen you think about all the things that retailers need to be good at ndash everything from pricing and promotions to localized assortment ndash itrsquos obvious they need to be sharper than they were five years agordquo
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base
ldquoThe ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and in some cases technologyrdquo he says ldquoItrsquos a totally different game Retailers must be more data driven in order to make a rapid responserdquo
No one is ruling out the possibility of more mega-deals this year since as Todd put it ldquoThere are always surprisesrdquo
However with the industry coming off a year of mega-mergers the total number of stores involved in merger activity this year will be down according to David W Schoeder principal in The Food Partners a Bethesda Md-based investment banking firm providing merger acquisition and divestiture and restructuring services to the food industry
ldquoBut over the next 36 months wersquore going to see consolidation driven by two factorsrdquo he says ldquoFirst if yoursquore operating a conventional store yoursquore probably in denial You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
CA
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39Continued on p 40
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
|
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LIF
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
LIF
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
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NIA
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
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NIA
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OC
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
OR
NIA
GR
OC
ER
48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
LIF
OR
NIA
GR
OC
ER |
51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
OR
NIA
GR
OC
ER
52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
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IFO
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
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CA
LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 39
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CA
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40
operating a conventional store with a twist Otherwise you wonrsquot be in tune with the new world order and what it takes to be successful todayrdquo
Schoeder says the other factor is an aging group of independents with no succession plan Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents
These are the ones Schoeder called ldquopac-menrdquo who have grown by gobbling up others
ldquoThese are the super independentsrdquo he says ldquoTheyrsquove got management teams in place theyrsquore generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successfulrdquo
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides
ldquoMost grocery retailers are not truly nationwide so filling in their portfolio is always attractiverdquo he says ldquoThis will probably happen more in supermarkets than other classes of retailrdquo
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory said Todd
ldquoCompetitive concerns are also driving dealsrdquo Todd says ldquoEveryonersquos selling food ndash dollar stores convenience stores clubs and other alternative formats Retailers are looking to protect their market or expand into new ones to increase sales and profitsrdquo
Clearly some geographic areas are more ripe for deals than others Todd said noting that the Southeast and to some degree the Southwest are still growing Some secondary markets can be attractive due to their low capital costs but itrsquos the major metro areas with built-in demographics that are more appealing The economy in and of itself will have little impact on
consolidation according to Schoeder What does have an impact is availability of credit he said noting that some banks shied away from lending to grocery stores after the Haagen and AampP bankruptcies
ldquoTheyrsquore still very skittishrdquo Schoeder says ldquoThe ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money not putting more equity into itrdquo he says
ldquoYou used to be able to borrow four times the cash flow to get a deal donerdquo he says ldquoThe debit to cash flow ratio is probably off a bit for strategic buyers But everything depends on the quality and vision of the operators You have to have a credible plan and the bite size has to be manageablerdquo
But scrutiny by lenders could be eclipsed by that of government agencies
ldquoThe Hagen debacle embarrassed the Federal Trade Commissionrdquo Schoeder says It even slowed down the AholdDelhaize merger he said noting that the FTC is doing an internal investigation to see what went wrong
Nonetheless Schoeder believes the agencyrsquos stance is still far more liberal than it was 10 or 15 years ago
ldquoThe focus now is making sure there are credible buyers that can operate the stores to be divestedrdquo he says ldquoTheir mandate is to make sure there is a viable competitor to maintain competition in the marketplacerdquo
Meanwhile Rampoldt believes the US supermarket industry is still attractive to overseas buyers
ldquoI worked a lot in Europerdquo he says ldquoThe competitive intensity there is enormous and the ability to grow by opening new units ended decades ago Wersquore only just getting to that life stage in the US yet there are still lots of places to grow by opening new stores and increasing square footagerdquo
So you want to sell the business or maybe buy another one but canrsquot find the right partners
A former Italian comedy writer and MBA v Brian Pallas has come with a unique idea called the Opportunity Network designed to connect nearly 6000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries
Opportunity Network is headquartered in London but the company now has offices in New York and Barcelona along with reps in cities like Dubai Paris San Francisco and is in the process of moving into Asian markets
The business has been described as something like the Craigslist of mergers and acquisitions Members can list businesses anonymously and connect with another that they think might be a good fit However there is a minimum deal size of $1 million
The app enables members to filter the deal by size location and industry So if yoursquore tired of looking for bargains on golf clubs or restaurants you can shop around for another company
ldquoThere are plenty of examples of successful retailers being owned by
non-merchantsrdquo he says ldquoIn many cases they try to free the business
by shifting investment and assets from things that donrsquot do anything
to things that do and improve the customer propositionrdquo
Continued on p 42
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
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CA
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Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
CA
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
OR
NIA
GR
OC
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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NIA
GR
OC
ER
48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
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NIA
GR
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
OR
NIA
GR
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
RN
IA G
RO
CE
R |
55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
OR
NIA
GR
OC
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
OR
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
RN
IA G
RO
CE
R
66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
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NIA
GR
OC
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswwwtrugrocercom
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
LIF
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
CA
LIF
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
LIF
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
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NIA
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OC
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
LIF
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
OR
NIA
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OC
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
OR
NIA
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p 40
|
CA
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42
Foreign investors might also be attracted to acquiring stores for alternative delivery formats like ldquoclick and collectrdquo according to Rampoldt
ldquoItrsquos very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the USrdquo he says ldquoIn fact it may be more attractive than just buying a company for brick and mortar (sales) Itrsquos inherently more complicated but I wouldnrsquot be surprised if many companies werenrsquot thinking about itrdquo
However entry as a startup like the route that German deep discounter Lidl is taking is certainly feasible
ldquoThey decided not to come in through acquisition but it all depends on the format It makes sense to grow organically if yoursquore operating a format that appeals to a specific segment of customers Where you site those stores is keyrdquo he said noting that an acquisition would not necessarily provide this flexibility
When considering acquisitions a strong cultural fit continues to be essential
ldquoIf you look at the companies that have been successful yoursquoll see that theyrsquove paid a lot of attention to individual cultures when bringing two firms together ndash with associates the culture they project to their customers as well as the pace at which they make changesrdquo he says
ldquoCompanies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day rdquo
Yoursquove got to think about the customer experience and protect the one-on-one interaction between customers and associatesrdquo he adds ldquoItrsquos important that the quality of that relationship is not jeopardizedrdquo
But the trickiest part of any acquisition may be the decision involving central vs local control and how much autonomy the regions and stores will actually have
ldquoItrsquos critical to get rightrdquo Rampoldt says ldquoThere are examples of both strategies being successful but you have to be one or the otherrdquo
Asked whether buyers are shying away from turnaround situations he replied ldquoNot really Therersquos still an appetite for that when the price is right and itrsquos clear what levers have to be pulled to turn the acquired company aroundrdquo
This is especially true for private equity firms who are likely to continue acquiring retail operations
ldquoThey like businesses where they understand what to do to get resultsrdquo Rampoldt says ldquoTheyrsquore very good about basic blocking and tackling around inventory management distribution store operations and efficiency Those things are cause and effect in retail and private equity firms have a good idea of what to do what they have to put into the business and how long it will take before they get outrdquo
But he quickly noted that acquisitions are not necessarily a short-term play for private equity firms
ldquoThere are plenty of examples of successful retailers being owned by non-merchantsrdquo he says ldquoIn many cases they try to free the business by shifting investment and assets from things that donrsquot do anything to things that do and improve the customer propositionrdquo n
37Entry into new businesses
37Expand customer base
36Expand geographic reach
34Enhance Intellectual
Properties or acquire new
technologies
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
25Opportunistic-target
becomes available
16Acquiring additional
supply chain elements
WHATrsquoS DRIVING ACQUISITIONS IN 2016
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
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NIA
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
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OC
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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NIA
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OC
ER
48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
LIF
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NIA
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OC
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
OR
NIA
GR
OC
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
OR
NIA
GR
OC
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
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IFO
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
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LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
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LIF
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
CA
LIF
OR
NIA
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OC
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43
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
LIF
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
NIA
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
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An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
LIF
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NIA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
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GR
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
OR
NIA
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OC
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
OR
NIA
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
It wasnrsquot so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans Locating
a market for recycled wood and metal was almost
considered progressive
Today sustainability has become an essential
part of every business across the nation
California consumers lead the nation in the
demand for preservation of our planet and its
resources sustainability is no longer an option
itrsquos an expectation for customers And where our
customers go as they say we follow
Take Kroger for example In the middle of their
49-acre campus in Compton Calif sits the first-
in-the-state anaerobic digester Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner
ldquoOur perishable food program donated $4 million
of food to our community partners last yearrdquo states
Kendra Doyel Vice President of Public Relations and
Government Affairs for RalphsFood4Less ldquoFood
which canrsquot be sold or donated is run through our
anaerobic digester which converts food to fuel This
fuel powers about 20 percent of our home offices
our warehouse the creamery and the transportation
center ndash all located at our Compton facilityrdquo
ldquoThe digester has reduced diesel truck trips by
5000000 miles each year ndash miles we used to drive to
take food to our composting center It also cleans up
about 29000 gallons of wastewater every day from
our creameryrdquo
By Cassandra Pye
For years now therersquos been a quiet movement under way on the part of the food industry to save the planet
These efforts are important to consumers they shave operating costs in a variety of ways they align with a complex and intricate supply chain and theyrsquore having a real impact on the industryrsquos environmental footprint Best of all these sustainability efforts arehellipwell sustainable
iStock
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
NIA
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
LIF
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NIA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
LIF
OR
NIA
GR
OC
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
RN
IA G
RO
CE
R |
55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
OR
NIA
GR
OC
ER
56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
RN
IA G
RO
CE
R
66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
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NIA
GR
OC
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
S AV I N G T H E P L A N E T hellip Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste ndash including packaging ndash creating a ldquomilkshakerdquo
which is heated and fed to the bugs Upwards of 150
tons of food waste is processed each day The result
the equivalent of power for 8000 homes annually is
produced to support the facility
And clean water ndash a byproduct of the process ndash is
reused Doyel says the company is now looking at
ways to eventually use particulate matter as compost
The processor sits in a compact space and according
to Doyel is both odorless and emits very little noise
ldquoThis is a fairly unique projectrdquo says Doyel ldquoThere
are anaerobic digesters all over the world but this one
sits in the middle of an urban area surrounded by
businesses homes and people Wersquove been operating
the project successfully for three yearsrdquo
RalphsFood4Less also engages in traditional
sustainable practices recycling about 7 million
pounds of cardboard plastic and metal annually
ldquoAnd wersquore also helping our customers live a more
green lifestyle by offering recycling inside our
stores offering green products ndash like light bulbs for
example ndash which help them to save energyrdquo she says
For Ralphs she adds sustainability means striving
to reduce the companyrsquos impact on the environment
by using natural resources responsibly while
minimizing waste in their operations
Brian Dowling Vice President for Public Affairs for
Albertsons-Safeway says the term sustainability over
the last decade has evolved
ldquoI would say sustainability wasnrsquot a term that was
tossed around too muchrdquo Dowling said ldquoBut if I look
at what companies did 10 years back it was about the
environmental footprint ndash so recycling collecting
cans cardboard etc
ldquoIf you look at where it is today itrsquos an opportunity
for companies to create value for their organization
and do good for the broader community at the
same timerdquo
Albertsons-Safeway whose 14 operating divisions
include Acme Shawrsquos and Jewel in the east and
midwest and Vons on the west coast has taken
environmental stewardship to a whole new level
ldquoSustainability has been at the root of what we do ndash
for a long timerdquo says Dowling ldquoRecycling cardboard
and plastic didnrsquot get headlines but our efforts in
recent years ndash on the seafood side and more recently
on the human trafficking side of the business ndash are
taking things to a whole different levelrdquo
Whole different level indeed The nationrsquos second-
largest grocery chain is close to hitting
an unprecedented target for seafood
ldquoIn the seafood space our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015rdquo
states Dowling ldquoAlthough we did not hit
our target for fresh we were pretty darn
close with our frozen ndash at 99 percentrdquo
Dowling says that in fresh [seafood] the
challenge is there arenrsquot good alternatives
available yet
ldquoSo wersquore really working hard with that
industry and that objective continues
ndash especially now that wersquore a larger
companyrdquo he says ldquoWe donrsquot have a goal
yet but wersquore working with FishWise and
expect to wrap up by Junerdquo
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices
Dowling says Albertsons-Safeway will
establish a goal for all of its banners
Sustainability efforts are in play on land
as well as sea
ldquoLegacy Safeway stores did recycling
starting in the 1960srdquo recalls Dowling
ldquoIn California we have the opportunity
to also backhaul and aggregate materials like
cardboard soft and hard plastic metal wood But
wersquore also focusing more on food wasterdquo
Dowling says Albertsons is taking a tiered approach ndash
expanding its partnerships with food banks to be able
to get food thatrsquos at the point where it canrsquot sell it but
can get it to food pantries by sell-by dates
ldquoWersquore always looking for new alternatives if we canrsquot
send product to a food bank but donrsquot want to send to
a landfill then we can compost it or send to farmers
for animal feedrdquo he says ldquoOur objective is to move
towards zero-wasterdquo
JUST THE NUMBERS ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled
n Well over 104000 tons sent to compost or animal feed
n 29 million pounds of seafood transferred to responsible sources since 2009
n First retailer in the world to offer Fair Trade Certified seafood ndash sushi grade tuna
n Set a goal to source 48 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items
n Set a goal to source only cage-free eggs for store operations by 2025 based on available supply
CA
LIF
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45Continued on p 46
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
CA
LIF
OR
NIA
GR
OC
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
OR
NIA
GR
OC
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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GR
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
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GR
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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy
Calif is one of several which has achieved zero-waste
status
Dowling says his company is now constantly
examining every part of their organization ndash
products community employees ndash against what
can be done for the planet
ldquoTherersquos also been a shift in consumer attitudes and
what they expect companies to do in this areardquo he
asserts ldquoThere are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible wayrdquo
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization
Dowling states continues to counsel and advise
the company on seafood issues He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way ndash for many
years to come
ldquoWersquore a penny-
on-the-sale
businessrdquo says
Dowling ldquoThat
makes us look
carefully at
opportunities to
save on water
energy shipping
costs All these
efforts make
good sense for the business therersquos a duality which
drives what we dordquo
For Richard Draeger Chief Operating Officer
Draegerrsquos Market San Mateo Calif sustainability is
a collection of practices
ldquoItrsquos not one thing itrsquos pretty much everythingrdquo he
suggests ldquoIt includes energy-efficiency initiatives
recycling programs ndash including containers but
also hazardous waste It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption
ldquoWe donrsquot want to burn energyrdquo he says ldquoAfter labor
and labor-related costs itrsquos the next highest line item
for our company Wersquore trying to mitigate costrdquo
And he says his company is looking at everything
because as a small company ldquowersquore looking at decent
paybacks ndash often five years for many of these itemsrdquo
he states
ldquoWersquove got R-30 [insulation] on our rooftops and
R-19 on our wallsrdquo Draeger says ldquoWersquore looking at
photovoltaic energy production for our facilities and
at the moment we are looking at ldquoBloom Boxesrdquo ndash
cogeneration of energy derived from natural gas ndash for
our operationrdquo
Draeger says LED lighting ndash lighting in general for
that matter ndash is incredibly important to lower costs
and sustainability
ldquoWersquove changed lighting literally throughout our
storesrdquo he says ldquoThere will not be a traditional light
anywhere For our Los Altos store (where theyrsquore
rebuilding the store from the ground up adding
25 percent more square footage) wersquore going to
include photovoltaic energy production wersquore also
considering Bloom Boxes and anything else thatrsquos
sustainablerdquo
Including food
ldquoThe food we select for sale is sustainablerdquo says
Draeger ldquoThe more we accept from local vendors
ndash especially produce thatrsquos considered much more
sustainable as those from distance sources ndash the
better Wersquore also using better refrigeration gases
so much has changed ndash including those more
dangerous gases from years agordquo
What do Draegerrsquosrsquo customers think
ldquoConsumer response is always positiverdquo Draeger
insists ldquoThey like to see that you employ sustainable
practices For example wersquove just started on closing
our open merchandised refrigerated fixtures
with doors ndash really nice glass doors on all of our
refrigeration fixtures ndash thatrsquos sustainablerdquo
Draeger also thinks that when a customer looks at
sustainability theyrsquore really looking at the types of
foods a retailer is presenting to them in the produce
department ndash buying locally and folks who are within
Continued from p 45
Ralphs Grocery Companyrsquos anaerobic digester
|
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OR
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46
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
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NIA
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
LIF
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
OR
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
OR
NIA
GR
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
S AV I N G T H E P L A N E T hellip Q U I E T LY
60-100 miles of your store He says consumers notice
that and theyrsquore willing to pay for it
ldquoWe donrsquot waste a whole lot of food either to be
honest with yourdquo says Draeger ldquoMost of it is
backhauled We get rid of a lot of organic waste that
way Not all communities wersquore in provide backhaul
to the farms Itrsquos expensive to do that for a small
retailer But if yoursquove got a community providing the
service itrsquos more cost effective to do it that wayrdquo
Draegers recycles materials often
ldquoThose things arenrsquot even on the radarrdquo says Draeger
ldquoTheyrsquore happening on the natural and have been for
a long timerdquo
The updated Los Altos store will have more natural
lights by way of skylights and windows And there
will be charging stations for electric vehicles (EVs)
ldquoAgain these communities are maturing and these
technologies are now available ndash so we provide the
support services to our customersrdquo
Draeger also poses a challenge to the industry
ldquoThe better we become at messaging [about] what it is
that we do the greater customer appreciation would
berdquo he insists ldquoThatrsquos the trick You do these things
as a business and donrsquot necessarily tout what you do
Itrsquos important to do thatrdquo
Draeger says they tell their customers about his
companyrsquos reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company ndash
including electronic control monitors and variable
speed compression motors all aimed at lowering
energy usage ndash but they can always tell customers
more of that story
Albertsonsrsquo Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts
ldquoEarly onrdquo he says ldquothe work we did made us
independent of other retailers Itrsquos not going to
happen that way anymore
Continued on p 48
CA
LIF
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47
An alternative to landfills and traditional compost programs Grind2Energytrade Organics Recycling System efficiently converts food waste to renewable energy Our non-sewer based technology enables you to dispose of all types of food waste mdash including kitchen fats oils and grease mdash faster cleaner and easier Reduce odors pests emissions and labor costs all while protecting the environment So whatever doesnrsquot make it to the table doesnrsquot have to go to waste Learn more at wwwgrind2energycom
Good for grocers Good for the environment
To schedule an appointment contactHeather DoughertyCommercial Solutions Group | Food Waste SpecialistsM 216-200-9439 | HeatherDoughertyemersoncom The Emerson logo is a trademark and a service mark of Emerson Electric Co All rights reserved
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
CA
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
RN
IA G
RO
CE
R |
55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
S AV I N G T H E P L A N E T hellip Q U I E T LYCONTINUED
ldquoThe supply chain is where there is greater
opportunity now for companies and others to have
an impactrdquo says Dowling ldquoWe were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives Now wersquore
looking at the supply web ndash that complex mix of all
involved ndash and deciding where opportunities for
sustainable efforts existrdquo
Human trafficking in the seafood supply chain for
example is complex and difficult to monitor says
Dowling Specifically where itrsquos happening and to
whom
ldquoThatrsquos where the opportunity exists nowrdquo he says
ldquoTherersquos so much more collaboration possible that
includes the industry governments NGOs and
others We need everyone at the table to discuss these
issues because they are larger than our companiesrdquo
Doyel Dowling and Draeger mimicked each otherrsquos
remarks on the question of why sustainability
Doyel ldquoThese efforts are in line with our core values
for our customer and our communityrdquo
Dowling ldquoThey are good for the planet and good for
our business toordquo
Draeger ldquoWersquore doing good and doing good for the
businessrdquo
In all cases customers win n
Cassandra Pye is CEO of 314 Communications LLC a regular contributor to California Grocer and a former lobbyist for CGA
The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy of Sunnyvale California that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used
Continued from p 47
|
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48 copy2016 Tyson Foods Inc Trademarks and registered trademarks are owned by Tyson Foods Inc 11828209
Rob McDougallGelsonrsquos Markets
Donna TyndallGelsonrsquos Markets
Bruce Wyatt Flowers Baking Co
Rob McDougall and Donna Tyndallof Gelsonrsquos Marketsand Bruce Wyatt of Flowers Baking Co
Tyson Foodscongratulates
on their inductions into the CGA Educational Foundation Hall of Achievement
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
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LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
Use a Better Formulafor Backroom OptimizationItrsquos time to rethink the role of the meat backroom The backroom is really an in-store manufacturing facility Here fresh meat is prepared weighed wrapped and labeled Run this process like a production line and keep pace with shopper demand while also managing costs and shrink
Using rugged and reliable equipment is a proven formula for backroom optimization Let METTLER TOLEDO help you increase operational uptime and productivity with the new powerful 800 series of backroom wrapping and labeling machines
880 Auto Wrapper
wwwmtcomretail-backroomLearn more
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
OR
NIA
GR
OC
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
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DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
ldquoThe Food Futures Lab is one of our longest
running programsrdquo said Rebecca Chesney
research manager for the Lab who also oversees
the grouprsquos 10-year forecast program
ldquoWe look at cities food water issues and every
year we take a different anglerdquo she said ldquoThis
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
themrdquo
Other studies have also led IFTF into areas that
might be closer to impacting todayrsquos food retailers
when it comes to consumers and employees
ldquoOur workable futures initiative is looking at the
lsquogigrsquo or on-demand economy and how itrsquos going to
affect things like health insurance and social safety
netsrdquo Chesney said
ldquoBasically the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations
A lot of people are trying to figure out what benefit
structure theyrsquoll need in the future and how to do
things differentlyrdquo
The goal according to Chesney is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies
Furthermore the loss of traditional benefits or
reduction of the traditional 9ndash5 workday will start
to impact what people eat at lunch how they
socialize and redefine work and school days
ldquoFor examplerdquo she said ldquoUber drivers might
make most of their money at night In this kind of
fragmented workplace we have to look at the types
of foods they need where theyrsquore eating them and
what theyrsquore shopping forrdquo
That means mapping food experiences ndash not only
eating food but also packaging branding accessing
food ndash the entire food experience
The eminent British statesman Winston Churchill once said ldquoItrsquos always wise to look ahead but difficult to look further than you can seerdquo
Difficult as it may be but thatrsquos exactly what the Institute for The Future a Palo Alto-based think tank and non-profit research organization is doing through diverse projects ranging from global economics and generational trends to technological developments ndash all of which can yield interesting insights into where and how people will live eat and shop in the decades to come
CA
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51Continued on p 52
By Len Lewis
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
|
CA
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ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
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CA
LIF
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Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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NIA
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
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DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
Continued from p 51
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWISCONTINUED
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CA
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52
ldquoAnd access to food impacts where we get our foodrdquo
she added ldquoRetailers need to think about that todayldquo
The Institute is not only tracking the further
fragmentation of retail but the next iteration of
retailing which is likely to be a mixture of on-demand
and fully-automated food delivery the latter of which
could be about 10 years away according to Chesney
As an example she cited Amazonrsquos Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper paper towels flour and
baby wipes
On another level Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
companyrsquos system
ldquoItrsquos tied to your Amazon account and knows how
much water yoursquore using when you will need filters
and automatically orders them for yourdquo she said
ldquoItrsquos a different type of online retail that changes
the extent to which consumers are involved in
shopping decisionsrdquo
Cheney said ittrsquos a new purchasing pathway thatrsquos not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category
However customer involvement could increase in a
different way
Consider a San Francisco-based company called
Betabrand a clothing designer with a platform
similar to Kickstarter
ldquoYou post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the itemrdquo Chesney noted ldquoOnce an
item gets enough votes it moves to a crowdfunding
stage for prototype designsrdquo
If it reaches a certain threshold and the company
can guarantee a minimum market Cheseny says
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item
ldquoThis way the company can reduce space inventory
costs and risk Itrsquos almost the opposite of automated
retail yet another online environment to watchrdquo she
said noting that many people are already funding
food products on Kickstarter
ldquoEven if people are not purchasing they are involved
in a communityrdquo Chesney said ldquoWe call it engaged
shopping They are not just consumers they are
actually participating in the development of a
product Betabrands is a signal of the future We look
for those signals and thatrsquos how we do our forecastsrdquo
People want to be able to access whatever kind of food
they want at any given time This isnrsquot just a 24-hour
grocery store The idea of convenience has changed
and retailers need to rethink what it really means
Another field of study for the Institute is automation
and automated shopping via ldquoBody Area Networksrdquo
as Chesney called it
ldquoThink about whatrsquos becoming networked and all the
different technologies that are connectedrdquo she said
ldquoToday itrsquos a smartphone or Fitbit But people are
working on clothing with sensors to detect hydration
levels when yoursquore working out There are skin or
injectable sensors that could track biometrics and
detect illnesses All these technologies on or in our
bodies will be connected to the other technology
around usrdquo
Chesney said people are focused on understanding
e-commerce and online retailing but ldquothe thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone The question is how
retailers can be involved with thatrdquo
All of these things add up to the next step in data
analytics
ldquoIt will be much more nuanced and will offer views
into preferences and tastes for different types of
consumersrdquo she said n
Len Lewis is editorial director of Lewis Communications Inc a New York-based editorial planning research and consulting firm He is a frequent contributor to California Grocer and several retail publications and trade groups in the US and Europe
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
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54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
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55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
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CA
LIF
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
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66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
GR
OC
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
MORE THAN 600 INDUSTRY PEERS FAMILY AND FRIENDS GATHERED IN COSTA MESA
CALIF RECENTLY TO HONOR THREE GROCERY EXECUTIVES INDUCTED INTO THE CGA
EDUCATIONAL FOUNDATION HALL OF ACHIEVEMENT
This yearrsquos inductees included Rob McDougall
President amp CEO and Donna Tyndall Senior Vice
President of Operations Gelsonrsquos Markets and
Bruce Wyatt Vice President of Sales Flowers
Foods Bakeries Group
The Hall of Achievement was created in 1992
to recognize those individuals that have made
significant contributions not only to the grocery
industry but the communities they serve
The three inductees brought the total number of
Hall of Achievement recipients to 45 and was the
second time executives from Gelsonrsquos Markets were Jim Van Gorkom CGAEF Chair NuCal Foods
F O U N D A T I O N D I N N E R C E L E B R A T E S
I N DU S T RY G AT H E R S T O HONOR GRO CE RY E X E C S
|
CA
LIF
OR
NIA
GR
OC
ER
54
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
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R |
55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
OR
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GR
OC
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
OR
NIA
GR
OC
ER |
59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
OR
NIA
GR
OC
ER
60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
OR
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
OR
NIA
GR
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65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
RN
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66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
GR
OC
ER
68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
recognized for their dedication to Californiarsquos grocery
industry In 2007 Gelsonrsquos executives Bernie Briskin
Bill Roulette Allan Scharn and Bob Stiles were
inducted into the Hall of Achievement
ldquoRob Donna and Bruce are true icons of our
industryrdquo said CGAEF President Ron Fong ldquoEach
inductee has a tremendous story to tell Each has
traveled different paths to reach this point in their
distinguished careers They are all deserving of this
prestigious awardrdquo
F O U N D AT I O N H O N O R S
CGAEFrsquos Shiloh London interviews Rob McDougall and Donna Tyndall during the dinner program
ldquoEach inductee has a tremendous story to tell Each has traveled different paths to reach this point in their distinguished careersrdquo said CGAEF President Ron Fong
Continued on p56
Abby Gillmore CGAEF Scholarship Recipient
BRUCE WYATT Vice President Sales
Flowers Baking Company
Bruce Wyatt is Vice President of Sales in Southern California for Flowers Baking Company headquartered in Thomasville Georgia
Bruce began his retail career at a young age working in his familyrsquos direct store delivery retail milk business in Knightstown Ind After moving to Apple Valley Calif Bruce worked as an independent distributor for Bell Brand Chips and Archway Cookies In 1981 he went to work for Oroweat Baking Co eventually becoming Regional Manager for Retail Sales In 2008 he went to work for Hansen Beverage Company Corona Calif as Director of Sales Two years later Bruce began his second career in the baking business accepting his present position with Flowers Baking Company
That same year Bruce was elected Headlite of The Illuminators an organization of vendors and suppliers dedicated to developing and enhancing key relationships within the grocery industry
Bruce is a member of the CGA Supplier Executive Council a former board member of the Food Sales Managers Club and has been involved in numerous charitable organizations including Olive Crest City of Hope Boy Scouts of America California Conference for Equality and Justice Muscular Dystrophy Association and Soccer for Hope Foundation
Bruce and his wife Kelli live in San Clemente Calif and have two sons Jackson and Christopher C
AL
IFO
RN
IA G
RO
CE
R |
55
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
OR
NIA
GR
OC
ER
56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
OR
NIA
GR
OC
ER |
59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
OR
NIA
GR
OC
ER
60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
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California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
OR
NIA
GR
OC
ER |
65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
RN
IA G
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66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
GR
OC
ER
68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
Led by event chairs Hee-Sook Nelson Gelsonrsquos
Markets and Jerry Whitmore retired Nestle DSD
the event raised more than $500000 ndash funds that
support the Foundationrsquos college scholarship and
tuition reimbursement programs
ldquoThe Foundation is extremely grateful to the many
companies and individuals that have donated to this
very worthy causerdquo Fong said ldquoThe funds raised
from this event will help support the Foundationrsquos
many worthwhile industry programsrdquo
The annual gala event included a live auction and
Fund-A-Need program that raised nearly $100000
ldquoThe generous support of the industry was
overwhelmingrdquo said Foundation Executive Director
Shiloh London ldquoThe grocery industry has a genuine
passion for helping others and that was certainly
demonstrated at the dinnerrdquo
In addition to the Hall of Achievement award Fong
presented each inductee with a special Legislative
Proclamation from their local elected legislator that
commended them on their achievement
In presenting the proclamations Fong praised all
three recipients for their commitment and dedication
to the industry Following his remarks brief
videos highlighting each inducteersquos personal and
professional accomplishments were aired
In what has become a tradition at the dinner a
Foundation college scholarship recipient shared with
attendees how receiving financial assistance played a
major role in their educational plans
This year Abigail Gillmore whose father is a senior
category manager at Gelsonrsquos Markets shared
insights into how her Foundation scholarships have
helped her realize her dream of becoming a teacher
Gillmore a junior at California Lutheran University
originally planned to major in psychology but
ldquodiscovered that my familyrsquos passion for teaching
had rubbed off on me I knew the best way for me to
help people was to change my major to educational
studies and become a teacher like my granddadrdquo
Continued from p 55
F O U N D AT I O N H O N O R SCONTINUED
|
CA
LIF
OR
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GR
OC
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56
Joe Early Unified Grocers Dave Frankeny Nestle USA Alyssa Barberio Unilever Mike OrsquoDonnell Unified Grocers
Kevin Konkel Raleyrsquos Jim Schulz International Paper CGAEF Trustee Jerry Landers Raleyrsquos
HOA Honoree Bruce Wyatt Flowers Baking Co Bob Butler retired Albertsons LLC and Vic Chiono The Coca-Cola CoMinute Maid Co
This year Abigail Gillmore whose father is a senior category manager at Gelsonrsquos Markets shared insights into how her Foundation scholarships have helped her realize her dream of becoming a teacher
Continued on p59
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
OR
NIA
GR
OC
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59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
OR
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GR
OC
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60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
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64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
OR
NIA
GR
OC
ER |
65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
RN
IA G
RO
CE
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66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
GR
OC
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68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
youThankfor your fresh ideas
and commitment to education
from your friends at
Congratulations Rob McDougall amp Donna Tyndall Gelsonrsquos Marketsand Bruce Wyatt Flowers Baking Companyfor your induction in the California Grocers Association Educational Hall of Achievement
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
OR
NIA
GR
OC
ER |
59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
OR
NIA
GR
OC
ER
60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
OR
NIA
GR
OC
ER
64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
OR
NIA
GR
OC
ER |
65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
RN
IA G
RO
CE
R
66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
GR
OC
ER
68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
DONNA TYNDALL Senior Vice President of Store Operations
Gelsonrsquos Markets
Donna began her career with Gelsonrsquos Markets 41 years ago as a clerkrsquos helper at the first Gelsonrsquos location in Burbank While attending UCLA she continued to work in a variety of positions including checker clerk and office cashier After graduating from UCLA she entered management as the companyrsquos first female manager She worked her way up to Store Manager and was later promoted to Supervisor of Operations
After three years in store supervision Donna assumed the position of Director of Grocery Buying and Merchandising and was promoted to Vice President in 1998 Her responsibilities then included Grocery Buying Merchandising Distribution and Marketing Six years later she was promoted to Senior Vice President of Store Operations and served in that position since 2004
Donna has a bachelorrsquos degree from UCLA and in 1989 graduated from the Food Industry Management Program in the Graduate School of Business at USC where she was selected by her peers as the ldquoStudent of the Yearrdquo In 2007 she was recognized by Progressive Grocer as one of the ldquoTop Women in Groceryrdquo in the United States and was honored by the Food Industries Sales Managers Club (FISMC) in 1998 and 2009 at its annual ldquoWomen in the Industryrdquo luncheon
Donna is involved in a wide variety of grocery industry causes She served on the CGA Board of Directors for six years from 2006 through 2012 She supports several charitable organizations including the City of Hope Food Industries Circle the Muscular Dystrophy Association (MDA) Olive Crest and the California Conference for Equality and Justice (CCEJ) In 2003 she was recognized by the MDA with the Dennis Day Memorial Award and in 2010 she received the Humanitarian Award from CCEJ
Donna is married to Mike Ketcham They reside in Sherman Oaks with their two dogs and together enjoy golfing traveling gardening and readingKristen Soler Pepsi Beverages Company and Paul
Turcotte CGAEF Trustee Pepsi Beverages Company
She has been awarded Foundation scholarships
the past three years and now her younger sister is
also a scholarship recipient
ldquoNone of this would have been possible without
the Educational Foundationrsquos supportrdquo she said
In addition to the Hall of Achievement Award
presentation retiring CGAEF Board of Trustee
George Frahm Stater Bros Markets was
recognized for his more than 10 years of service
to the Foundation
ldquoNone of this would have been possible without the Educational Foundationrsquos supportrdquo Abigail Gillmore said
Leah McDougall Rob McDougall Hee-Sook Nelson Donna Tyndall Mark Motsenbocker
F O U N D AT I O N H O N O R S
Continued from p 56
Continued on p60
CA
LIF
OR
NIA
GR
OC
ER |
59
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
OR
NIA
GR
OC
ER
60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
OR
NIA
GR
OC
ER
64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
OR
NIA
GR
OC
ER |
65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
RN
IA G
RO
CE
R
66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
GR
OC
ER
68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
ROB MCDOUGALL President amp CEO
Gelsonrsquos Markets
Rob has been in the grocery industry for more than 40 years In January 2012 he assumed leadership of Gelsonrsquos Markets a chain of 18 Southern California supermarkets founded in 1951 that prides itself on quality and unmatched customer service
A Southern California native Rob began his grocery career at age 16 as a bagger with Vons and worked his way through various positions including Produce Manager Store Director and Produce Supervisor Rob later moved to Michigan to work for DampW a small upscale chain of markets He left DampW as its Chief Operating Officer to return to his Southern California roots
Rob joined Gelsonrsquos Markets in 2007 and quickly leveraged his previous experience to steer Gelsonrsquos to a greater inclusion of organic and local products While broadening his responsibilities Rob has overseen key initiatives such as new designs for Gelsonrsquos produce departments a move into enhanced gluten free itemization increased private label products expanded selection of organics and an investment in healthy selections
Rob serves on both the Unified Grocers Inc and Western Association of Food Chains (WAFC) Board of Directors He is a past director of the Fresh Produce Council and actively supports the grocery industry through the Food Marketing Institute and the California Grocers Association
Rob has been married to his wife Leah for 37 years and has twin adult sons Shaun and Robert Rob and Leah are also the proud grandparents of 11 grandchildren ranging in ages from 12 years to three months In his off time Robrsquos passion is to spend time with his family
ldquoFor over 10 years George was an integral part of
the Foundationrsquos Board of Trusteesrdquo said outgoing
CGAEF Chair Jim Van Gorkom NuCal Foods
ldquoGeorge brought a wealth of knowledge experience
innovative ideas and strategic thinking to the
Foundation and perhaps most valuable his tireless
efforts to increase the visibility and credibility of the
Foundation within the grocery industryrdquo
The Foundation was created under the direction
of the California Grocers Association Board of
Directors in 1992 Its mission is to provide financial
assistance to advance the educational goals of CGA
member company employees and their dependents
and offer educational programs to advance the
grocery industry n
Marco Robles Cardenas Markets and wife Rosa
Renee Amen Super A Foods Peachetta Reid and John Najjar Cardiff Seaside Markets Lou amp Dorie Amen Super A Foods
F O U N D AT I O N H O N O R SCONTINUED
Continued from p 59
|
CA
LIF
OR
NIA
GR
OC
ER
60
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
OR
NIA
GR
OC
ER
64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
OR
NIA
GR
OC
ER |
65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
RN
IA G
RO
CE
R
66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
GR
OC
ER
68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
Wersquore making adierence
Albertsons Companies is focused on the challenges of food waste to help shrink our environmental footprint while
addressing hunger in America
Our backhaul process picks up reusable trays and recyclables at the point of product delivery Recyclables are collected and sent to the appropriate recycler composter or farmer for reuse resulting in
bull Reduced GHG emissionsbull Over 718 million pounds of food donatedbull Fewer trucks on the roadbull 475491 tons of recycled materials diverted from landll (2014)
How we do it
Diverted from landfill
31 tonsALUMINIUM
134494 tonsMISC RECYCLING
of waste kept out of landlls as of 2014 from Safeway stores alone
228540 tonsCARDBOARD
8198 tonsPLASTIC BAGS
84655 tonsCOMPOST
475491+ tons
19573 tonsANIMAL FEED
Reducing food waste is the right thing to do for our communities our customers
the environment and for California
Food donated
718 million lbsIN CALIFORNIA ALONE
SWYDCORPIV57868_CGA_AdIssues_2016_V1_032016
SWYDCORPIV57868_CGA_AdIssues_2016_V1indd 1 32516 835 AM
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
OR
NIA
GR
OC
ER
64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
OR
NIA
GR
OC
ER |
65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
RN
IA G
RO
CE
R
66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
GR
OC
ER
68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
15
MIN
UT
ES
WIT
Hhellip
|
CA
LIF
OR
NIA
GR
OC
ER
64
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
OR
NIA
GR
OC
ER |
65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
RN
IA G
RO
CE
R
66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
GR
OC
ER
68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
California Grocer The industry seems to have a
love affair with anything tagged local What do
consumers really think
Kummer ldquoItrsquos more important than ever even
though consumers donrsquot really know what it
means Everyone has their own definition of how
many miles around the store or restaurant it should
come from Tut they like the idea of helping local
economies Itrsquos the main reason I care about itrdquo
Is there a mileage number
ldquoSome people say 40 miles some say 100 It depends
on where the settlements are around you Yoursquore
helping keep a place thatrsquos not very far from your
home thrivingrdquo
What about environmental issues
ldquoIrsquom not entirely convinced buying local is better for
the environment It can use more resources than
big farms that offer more economies of scale And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurantrdquo
The whole Chipotle Ecoli contamination has put
a spotlight on safety of local products
ldquoThatrsquos complicated Organic and local doesnrsquot mean
safer Unfortunately thatrsquos part of the lesson learned
from Chipotle It generally means itrsquos better for the
people who raise your food Thatrsquos what I think
consumers should be focused onrdquo
Is local overrated considering availability of fresh
products from around the world these days
ldquoUndefined but not overrated But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community Thatrsquos what it means to me Itrsquos about
making sure people are able to live comfortably
in a community thatrsquos supported by community
services Itrsquos about farms small businesses or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centersrdquo
I get the impression that lsquolocalrsquo has just become
a marketing and advertising buzzword
ldquoI think thatrsquos absolutely true People have to make
up their own minds by going to their stores and
asking questions Itrsquos up to consumers to enforce
the definitionrdquo
Are they asking questions
ldquoNo they just take their word for itrdquo
Whorsquos driving local food trends
ldquoI think itrsquos Millennials It starts with concerns about
their own health and that of their families Then itrsquos
about how much money theyrsquore spending on food
and then itrsquos about incorporating social idealsrdquo
Whatrsquos considered healthy food Will the
argument over GMOs continue
ldquoI think the GMO argument will go away regardless
of the demographic group Lower income people
are equally concerned with health and fresh
products They may not have access to it and lack
time to make it but they are aware and concernedrdquo
What do you see coming in new food trends
ldquoA lot of it was what I saw at the recent Fancy Food
Show ndash Paleo diets higher fat meats Therersquos much
less fear of fat today so people are returning to meat
1 5 M I N U T E S W I T H hellip
Corby Kummer is an acclaimed food journalist whose books and columns in The Atlantic
Boston magazine and the New Republic have become must-reads for foodies amateur and
professional chefs Kummer who isnrsquot shy about sharing his views on whatrsquos being sold and
how spoke with California Grocer about a few of his favorite issues
Corby Kummer
Continued on p 66
BY LEN LEWIS
CA
LIF
OR
NIA
GR
OC
ER |
65
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
RN
IA G
RO
CE
R
66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
GR
OC
ER
68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
Continued from p 65
Gluten-free is still roaring along and I donrsquot see a
reduction But I saw organic leveling out and not as
much product with whole grains as two years agordquo
Natural and organic is price of entry in retailing
these days
Yes But organic what
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep
ldquoNo I donrsquot think they are Itrsquos just wishful thinking
on our part Itrsquos not that this generation doesnrsquot
want to return to home cooking therersquos just a
certain fear of it Therersquos always the excuse therersquos
no time and buzzwords like local are often proxies
or excuses for not making food for your familyrdquo
Anything retailers can do to get people back
in kitchen
ldquoI think there should be more chopped fresh
vegetables Also cooking classes at supermarkets
and community centers would help as well as
demos in stores if retailers are willing to make the
investment These ideas have been around a long
time Generally what gets people to cook again is
when they realize they can save money by doing it
themselvesrdquo
What do you think about home delivered
meal kits
ldquoI did a recent column on that in the New Republic I
asked why anyone would lsquopay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recyclersquo Clearly they are
competing with supermarkets Irsquove tried a variety of
meals from four different companies and what they
had in common was a lot of packaging It has its
advantages but I wouldnrsquot buy another meal kitrdquo n
1 5 M I N U T E S W I T H hellip|
C
AL
IFO
RN
IA G
RO
CE
R
66
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
GR
OC
ER
68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
Congratulations
2016 Hall of Achievement InducteesFrom your friends at
Celebrating 145 years of grocery SMARTS
copy Copyright 2016 Smart amp Final Stores Inc
BerryImpressive
ranchosanmiguelmarketscommyfood4lesscom
Congratulations to the 2016 CGA Educational Foundation Hall of Achievement Award RecipientsROB MCDOUGALLamp DONNA TYNDALL (Gelsonrsquos Markets) amp BRUCE WYATT (Flowers Baking Company)
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
CA
LIF
OR
NIA
GR
OC
ER
68
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
AD
VER
TISE
R IN
DEX
PAGE COMPANY PHONE FAX EMAIL WEBSITE
63 Albertsons Companies Inc 925-467-3000 925-467-3323 wwwalbertsonscom
36 Bimbo Bakeries USA 714-319-0517 wcrockerbbumailcom wwwbimbobakeriesusacom
37 C amp H SugarASR Group 510-787-4416 510-787-4205 kentkunsmanasr-groupcom wwwchsugarcom
27 CampS Wholesale Grocers Inc 916-373-4286 916-373-4296 epearlmacswgcom wwwcswgcom
IBC Certified Federal Credit Union 909-261-4065 626-246-3111 ghurdvonscucom wwwvonsefcuorg
31 Coca-Cola Refreshments 213-746-5555 213-744-8765 mikandersoncoca-colacom wwwcokeccecom
47 Emerson Grind2Energy 216-200-9439 heatherdoughertyemersoncom wwwgrind2energycom
67Food 4 Less (Stockton) Rancho San Miguel Markets
209-957-4917 209-956-8550 wwwmyfood4lesscom
19 Fresno Food Expo 559-227-9999 559-221-4376 infofresnofoodexpocom wwwfresnofoodexpocom
62 Gelsonrsquos Markets 818-906-5709 818-990-7877 wwwgelsonscom
21 Harris Ranch Beef Company 559-896-3081 559-896-3095 bradcaudillharrisranchcom wwwharrisranchbeefcom
66 Hidden Villa Ranch 800-326-3220 714-680-3080 bkellyhiddenvillacom wwwhiddenvillacom
26 Horizon Sales 714-979-4844 714-979-4955 horizonhorizonsalescorpcom wwwhorizonsalescorpcom
32 Illuminators 925-973-6183 jfrenchco-salesnccom wwwilluminatorsorg
13 International Dairy Deli Bakery Association 608-310-5000 608-238-6330 iddbaiddbaorg wwwiddbaorg
37 MelissarsquosWorld Variety Produce Inc 323-588-0151 323-584-7385 hotlinemelissascom wwwmelissascom
49 METTLER TOLEDO 614-438-4511 614-438-4900 USRetailmtcom wwwmtcomretail
BC MillerCoors 614-378-5538 jessicaowensmillercoorscom wwwmillercoorscom
35 Miltonrsquos Baking Company 858-350-9696 858-350-9695 ddimondmiltonsbakingcom wwwmiltonsbakingcom
5 Moss Adams LLP916-503-8206 818-577-1845
stephenredmondmossadamscomjeffclairmossadamscom
wwwmossadamscom
22 Nestle Purina PetCare800-421-1721 x9 314-982-4876
314-982-2860 paulcookenestlepurinacom wwwpurinacom
53 NuCal Foods 209-254-2200 209-254-2255 wwwnucalfoodscom
5 Oberto Brands 925-786-9722 916-740-2947 richarnoldobertocom wwwobertocom
25 PepsiCo Inc 949-330-5804 949-643-5765 douglastoddpepsicocom wwwpepsicocom
57 Raleyrsquos 916-373-3333 916-444-3733 wwwraleyscom
7 Retail Marketing Services Inc800-252-4613 818-563-3031
818-563-3041 wwwcartretrievalnet
67 Smart amp Final Stores 323-869-7500 323-869-7862 wwwsmartandfinalcom
58 Southern Wine amp Spirits 562-623-2677 562-407-3815 franksantangelosouthernwinecom wwwsouthernwinecom
41 TruGrocer Federal Credit Union 208-385-5273 208-385-5290 cdemaraytrugrocercom wwwtrugrocercom
48 Tyson Foods Inc 480-949-6700 480-948-0755 robertbukovectysoncom wwwtysonfoodscom
15 Unified Grocers Inc 323-264-5200 323-729-6619 customercareunifiedgrocerscom wwwunifiedgrocerscom
16 VampV Supremo Foods Inc 909-297-9937 pjacobovvsupremocom wwwvvsupremocom
61 Zenith Insurance Company 818-713-1000 818-710-1860 jlindsaythezenithcom wwwthezenithcom|
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Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
Not Your Everyday DishesFind Blue Moonreg recipes at bluemoonbrewingcompanycom
copy2016 BLUE MOON BREWING COMPANY GOLDEN CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL