Advancing the Food Industry of Minnesota Spring 2022
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Spring is sweeter with Minnesota’s favorite dairy creams. KEMPS IS DOMINANT BRAND IN THE CATEGORY KEMPS 28% PRIVATE LABEL ORGANIC VALLEY 4% 61% LAND O LAKES 4% ALL OTHER 3% CREAM BRAND $ SHARE MN MULO SOURCE: IRI - 52 weeks ending 1.23.22. Kyle Punton Director of Sales 612-723-5596
HOT IDEAS FOR MINNESOTA GROCERS Save money. Save energy. Upgrade your stores’ heating systems and earn valuable savings with our rebates to help reduce your up-front costs and enhance your energy efficiency. Whether it’s time to replace or upgrade, Xcel Energy offers substantial rebates on a wide range of energy-efficient equipment, from aerators and sprayers, to boilers and boiler add-ons, and much more. Contact an Xcel Energy account manager or one of our energy advisors: 855-839-8862 or visit xcelenergy.com/HVACR. © 2022 Xcel Energy Inc.
Advancing the COVER Food Indus try of Minn esota Spring 2022 Sales and Advertising Industry moves full steam Karly Ackerman, ahead as it makes adjustments Minnesota Grocers Association Editor and navigates the future. Jamie Pfuhl, Minnesota Grocers Association Design Contents Ideal Printers Inc. Spring 2022 Cover.ind d 1 1/24/22 9:02 AM MGA Board of Directors Chair Doug Winsor, Jerry’s Enterprises, Inc. Past Chair F EATURES Kris Kowalski Christiansen, Kowalski’s Companies, Inc. Vice Chairs 8 COVID-19 Opportunities Brian Audette, UNFI The last two years have completely transformed the food industry Mark Collier, Superfair Foods and what consumers expect of their local grocer. Retail food industry Greg Kurr, KEMPS consultant Michael Sansolo examines how we can successfully open the Jaime Mackenthun, Mackenthun’s Fine Foods door to an entirely new future of the whole industry. Patrick Miner, Miner’s, Inc. Chris Quisberg, S & R Quisberg, Inc. Paul Radermacher, Radermacher Holdings, Inc. 14 What is Next for Vaccine Mandates? Andrea Teal, Teal’s Management Susan Fitzke of Littler Mendelson P.C. details the outcomes of the Craig Thorvig, Chris’ Food Center Occupational Safety and Health Administration (OSHA) vaccine-or-test (MGA Foundation Chair) emergency temporary standard for large employers. She outlines what Directors the recent ruling means to employers and proactive next steps for your Jim Almsted, Almsted Enterprises organization. Darren Caudill, Cub Foods Greg Cross, SpartanNash Mary Fuhrman, Hy-Vee Food Store 18 Retail Forecast 2022 – Choppy Waters; Favorable Winds Curtis Funk, Lund Food Holdings, Inc. Retailers should expect a deceleration of sales activity in 2022 as Mike Hajlo, Pepsi Beverages Company shoppers shift a growing portion of their disposable income to services. Dan Kueppers, Reyes Coca-Cola (MGA Council Chair) A generally robust economy, however, should help buoy revenues. Matt Lilla, ALDI Inc. The beneficial effects of aggressive housing activity, high employment, Kristi Magnuson Nelson, growing wages, and Federal infrastructure initiatives should more than Hugo’s/Valley Markets, Inc. makeup for the costs of crippled supply chains and pandemic-related Paul Martin, Willie’s Super Valu Dave Meyer, Coborn’s, Inc. labor shortages. Tom Reinhart, Kwik Trip, Inc. Reade Sievert, 22 Celebrating 125 Years - Conversations With The MGA Associated Wholesale Grocers, Inc. In honor of celebrating our 125 years of advancing the food industry Brandon Smith, Holiday Stationstores, Inc. of Minnesota, the MGA will take a walk down memory lane, visit Lauri Youngquist, Knowlan’s Super Markets, Inc. with the MGA Team, and talk to our members. Read more about your membership and the importance of participation from Karly Ackerman, Minnesota Grocer covers the Minnesota food MGA Membership/Communications Manager. industry: supermarkets, superstores, convenience stores, specialty grocers, wholesalers, sales agents and manufacturers. Minnesota Grocer, published quarterly, is the official publication of the Minnesota Grocers Association. Subscription price is included DEPAR TMENTS with membership. Reprints available. In an effort to reduce our carbon footprint and to support 6 From the President 30 Advertisers Minnesota Business, MGA prints this magazine on Flo coated papers. Flo is made and manufactured in Cloquet, 24 People, Stores, & Companies Minnesota. It is FSC certified (meaning more trees are planted by the paper industry in these forests than are cut down to be used for making paper) and is made up of at least 10% recycled fiber. MG A T EA M Minnesota Grocers Association Jamie Pfuhl, President 1360 Energy Park Drive, #110 jpfuhl@mngrocers.com St. Paul, MN 55108 651-228-0973 (metro area) Karly Ackerman, Membership/Communications Manager 1-800-966-8352 (outstate) kackerman@mngrocers.com 651-228-1949 (fax) Steve Barthel, Government and Community Relations Manager www.mngrocers.com sbarthel@mngrocers.com @MNGrocer Minnesota Grocer Spring 2022 5
From the President JA M I E PF UH L Imagination is everything. It is the preview of life’s coming attractions. Albert Einstein H appy 2022 - here’s hoping Imagination to action. These two Make sure that you mark 2020 really is hindsight! young men envisioned a rocket your calendars to attend and Again, this year is starting ship from a basic shopping cart. consider adding your name with a heaviness. At the And, with a little ingenuity – they to the sponsoring companies beginning of the COVID-19 were off. The look of joy and a little (see page 11). One feature you pandemic, there was fear and surprise is inspiring. That is our task, will see in the magazine is the uncertainty, but there was also hope. as a service industry, to imagine “Conversations with the MGA”, If we just work together, do what is the future, to inspire, and to act. (see pages 22-23), this is a fun asked of us, we will get to the other Yes, the challenges still exist, but way to talk a walk down memory side of this crisis. Fast forward to let’s focus 2022 on using our talents lane. Reach out to us with your 2021, this year found us awaiting to add some surprise and joy. stories – it is great to hear about the “new normal”. Everyone was The MGA has experienced our history from your perspective. anxious to build back a sense of disruptors as well, and the core Over the decades, our collective normalcy – a glimpse of life as we competencies of the association work has created a solid foundation knew it. Now staring down 2022, have been challenged. The MGA is for success. As we move from we know there really is no new looking forward to delivering some imagination to action, we are normal. Patience is thin, the fatigue surprise and joy this year as we committed to being a part of is palpable, and hope is waning. celebrate 125 years of advancing the greater conversations as our As an industry we praise the industry. We are one of the oldest communities grapple with some astounding spirit of our team trade associations in the state, and very complex issues. The list of members, we are proud of our this honor makes us incredibly conversations around labor, supply resiliency and our unwavering proud. What the association has chain, sustainability, health, and capacity to get the job done. We accomplished over the years is an commerce are endless – and have never stopped leading in inspiration for all. There are so many everyone wants industry at the our community, getting food tangible successes. The leadership table. This is a testament to our to our neighbors, and being and representation over the years reputation, built on decades of an active participant in the are impressive and our imagination leadership, and your engagement. concerns for the greater good. for the future is endless. We need and appreciate your Nothing short of amazing! We know how important face- support of the MGA. Our team Yet, disruptors continue at every to-face connections are and we stands ready to assist you, our turn - supply chain issues are are committed to bringing more members, just let us know how real, labor shortages are a fact, opportunities in 2022. Our annual we can help. Thank you for your and inflation is affecting every conference celebration will be commitment to the association. Minnesota basket. The question a not-to-miss event this year as P.S. 22 is my lucky can no longer start with a “when” it we showcase our 125 years. number– just imagine! must start with a“how”. That is why we were drawn to our cover image. 6 Minnesota Grocer Spring 2022
COVID-19 OPPORTUNITIES By Michael Sansolo Written Exclusively for the Minnesota Grocers Association I ’m not sure I can name a single The most obvious is how the aren’t as hard as they thought. That’s song from my life that I dislike pandemic has essentially provided where industry has the opportunity more than “Celebrate Good the food retail industry with an to jump into partner with shoppers Times”by Cool and the Gang. And unheard-of second chance to to help guide them and reinforce it’s highly likely that there is no connect with shopper needs and the benefits of home cooking. more inappropriate song for the regain dominance in mealtime. As always, that’s not a simple start of COVID-19’s third year of Think about it, for decades now the process, but it’s an incredible disruption, but just maybe we need barely silent killer of industry sales has opportunity that should not be to think about this a different way. been the ongoing erosion of meals to missed. COVID-19, we know, has In countless ways, COVID-19 has food-away-from-home. The dollars been hard on all sectors of the made life, business, and everything lost to restaurants—from fast food to population, but probably no one you can think of absurdly difficult. white tablecloths—far outweighs the suffered more than young moms Virtually every problem food number of sales lost to category killers who suddenly found themselves retailers in Minnesota (and beyond) or new retail competitors of any type. running the home, creatively are grappling with these days For many years, and countless sourcing products, teaching, school can be traced to the pandemic. reasons—societal, economic, and and providing front line medical Labor shortages, supply chain more—home cooking seemed care—oh, and in many cases, still disruptions, inflationary spikes, to be fading away. It could easily working at their usual jobs. new demands on business (think be argued that Gen Z’s young Young moms are in many ways online shopping or enhanced adults are the third or fourth the sweet spot of winning back cleaning) and so much more can consecutive generation to grow up consumer dollars. Luckily the entire all be traced right to COVID-19. without home cooking traditions industry can provide help—at But let’s try to turn this problem in their memory or experience. least when it comes to meals. around and look at all the new COVID-19 erased all of that. It starts with meal ideas, the bane of realities, including some incredible Thanks to social distancing, restaurant every homemaker. Research through possibilities, which the pandemic sales plummeted and consumers the years has reminded us that meal has also created. And just maybe we returned to their home kitchens. Just prep begins with meal ideas and can start considering all the ways as suddenly consumers remembered ends with cleaning up the mess. A the seemingly endless COVID-19 the importance of supermarkets, their local supermarket can’t help dry the battle has opened the door to an employees, and products to their lives. dishes, but stores could certainly entirely new future for the whole And, we can hope they also find creative ways to build menus industry. (And no, I’m not drinking learned that cooking, baking, and - possibly by engaging shoppers while writing this article!) other meal preparation challenges on social media to share recipes. 8 Minnesota Grocer Spring 2022
Stores could feature a handful Remember, the industry doesn’t of recipes each week and speed have to win back every meal lost the shopping trip by simple cross- to the restaurant industry, but merchandising to allow shoppers to even regaining a small fraction find everything they need to make would produce amazing sales those meals (including desserts, gains. See: COVID-19 has spices, beverages, or whatever) in a produced some good times. single location. In the process, the Certainly, the new realities created store simplifies the shopper’s trip by this very unusual period aren’t all and the store gets to sell additional simple or inexpensive. The explosion products—the ultimate win-win. of remote shopping—whether Beyond simply offering recipes through delivery or curbside pick- and ideas, stores (helped by up—happened so quickly. It has been suppliers) can help educate shoppers incredibly challenging, but also caused been forged with shoppers and to on the nutritional benefits of the industry to learn an entirely new demonstrate how the industry is those same meals, in the process way of marketing at warp speed. And there to provide the products and building trust in the benefits it has been done successfully by many. services people need at the critical of eating at home both during The new realities of the COVID-19 moments when they need them most. and, hopefully, after COVID-19. period are only now coming into The bottom line is that celebrating Another benefit of COVID-19 has focus and it may take years to good times is simple and obvious, been the widespread reliance and understand how the pandemic but there’s far more to be gained acceptance of QR codes, which will reshape shopping, consumer by solving problems in tough stores could use to guide shoppers attitudes, staffing realities, and times, especially when those are to a world of useful information. more. What’s more, the sudden problems faced by your shoppers. What’s more, shoppers might resurgence of inflation may further And for that reason, the biggest discover the amazing time-saving alter shopping patterns, bringing a change reality of COVID-19 might products that now populate the return of shopping and marketing well be how the pandemic has shelves of supermarkets. In many strategies not seen since the 1980s. created the opportunity for the ways, cooking today is significantly The challenge for the entire supermarket industry to build an simpler than a few decades ago, industry is to adapt and, where entirely new relationship with a new and those products exist in every possible, to maximize and lock in generation of shoppers by creatively category and on nearly every shelf. the gains of this strange era. To using the new tools of the day. reinforce the connections that have Now that’s worth celebrating! Your Paving & Maintenance Specialist Since 1953 www.mnroadways.com (952) 496-2651 Minnesota Grocer Spring 2022 9
125 YEARS OF ADVANCING INDUSTRY ELEBRATING THE MGA C MGA ANNUAL ONFEREN E C C JULY 31 - AUGUST 2, 2022 MADDEN S RESORT, BRAINERD, MN ' Join us in honoring 125 years of consumers, careers, & community
THANK YOU SPONSORS PLATINUM Legacy Leaders Associated Wholesale Grocers, Inc. Crystal Farms Dairy Co. KEMPS PepsiCo Beverages North America SpartanNash UNFI / Cub Foods GOLD Engagement Drivers Keurig / 7UP Old Dutch Foods, Inc. Prairie Farms Reyes Coca-Cola Russ Davis Wholesale SILVER Dedicated Supports Barrel O' Fun & Rachel's Bimbo Bakeries USA Blue Bunny Country Hearth / Pan-O-Gold Baking Company Hormel Foods JB / No Name KeHE Distributors Land O'Frost / Ambassador Mason Brothers Company Post Consumer Brands SCR / Hill Phoenix Sparboe Companies BRONZE C ommitted ALDI Partners PHT Systems Don’t miss out - there is still plenty of time to sponsor this year’s celebration. Join us in supporting and honoring your trade association! Contact Karly Ackerman at kackerman@mngrocers.com for more information.
At SpartanNash, our flagship exclusive brand, Our Family, was developed more than 115 years ago; the oldest and most well-established in the industry. The number one reason for this success and longevity is our commitment to keeping the customer first - listening, responding, performing. 2000+ SKUs currently available throughout the entire store Product quality guarantee for consumers Exclusive marketing support, including industry leading social media solutions Multi-tiered community support program Comprehensive merchandising program Associate engagement plan SCAN HERE TO LEARN MORE Contact John Paul, VP Sales (1-616-878-8161) | john.paul@spartannash.com or Greg Cross, Development Manager (1-320-292-0382) | greg.cross@spartannash.com for more information.
thank you! Thank you MGA and all the members in the food industry who participate. We are all in this together!
What is Next for Vaccine Mandates? By: Susan Fitzke, Littler Mendelson The Rise and Fall of OSHA’s the ETS will continue to serve as its mandates and gives employers the Vaccine Mandate proposal for a permanent standard. flexibility to design policies that they The Occupational Health and Safety In addition, before the ETS was believe work best in their specific Administration (OSHA)’s embattled withdrawn, the U.S. Secretary of Labor circumstances. For those employers Emergency Temporary Standard (ETS) Marty Walsh issued a statement on who do not wish to enact or to maintain regarding COVID-19 was set to effect the Supreme Court ETS ruling urging a vaccine mandate or testing policy, a majority of employers. Under the all employers to require workers to it is clear that, at a minimum, other ETS, as of January 10, 2022, employers get vaccinated or tested weekly. The COVID-19 safety protocols must be in with 100 or more employees were Secretary reminded that employers place to protect workers from known required to promulgate COVID-19 are responsible for the safety of their hazards associated with COVID-19, policies for their workforce; provide workers on the job and noted that such as masking, social distancing, paid time off for receiving a vaccination irrespective of the ultimate outcome and quarantining requirements. and/or recovering from side effects; of the judicial challenges to the There are practical considerations as collect information on their workforce’s ETS proceedings,“OSHA will do well for employers who have already vaccination status and maintain a everything in its existing authority put in place policies to comply with the “vaccine roster”; and, as of February 9, to hold businesses accountable for requirements of the ETS. A complete 2022, require employees entering the protecting workers, including under roll back of such policies now at the workplace to either provide proof of the COVID-19 National Emphasis height of the Omicron surge may vaccination for COVID-19, or provide Program and General Duty Clause.” leave employees wondering or cause weekly negative COVID-19 test results. The extent to which OSHA will try concern in the workplace. Moreover, While many employers were still to take action under either of these the vaccine does help reduce both working towards compliance, on standards for employers who fail to the infection rate and time needed January 13, 2022, the United States institute a COVID-19 vaccination for quarantine following an exposure, Supreme Court granted emergency policy or a policy with a testing which can be both beneficial to the relief to stay implementation of component remains unclear. individual employees and useful the ETS. The Court’s decision put Employers may also be or become to employers who find themselves implementation and enforcement of subject to COVID-19 vaccination and in a current labor shortage. On the the ETS“on hold”pending further testing requirements at the state and other hand, in a competitive labor review by the U.S. Court of Appeals for local levels, which are not affected market, a difference in vaccination the Sixth Circuit, and, conceivably, a by Supreme Court’s decision. or testing requirements can impact return visit to the Supreme Court itself. success rates in the war for talent. What is Happening in Minnesota? In a 6-3 decision, the Court held that Employers electing to move forward On January 3, 2022, Minnesota those challenging the ETS (including with a mandatory vaccination policy, OSHA adopted the ETS adopted the a coalition of businesses and trade even though the ETS has been federal ETS in the state of Minnesota. associations, as well as a coalition withdrawn, will continue to face a Within hours of the Supreme Court’s of states) were likely to succeed on number of legal questions that must January 13th decision, Minnesota their argument that OSHA lacked be answered. Such employers must OSHA announced that it would the authority to promulgate the ETS. consider issues that are largely driven suspend enforcement of the ETS. As the Court explained, under the by state law, such as whether and under Similar to federal OSHA, Minnesota law, OSHA is empowered to“set what circumstances time to vaccinate OSHA continues to “strongly workplace safety standards, not broad is compensable, whether time to test encourage”employers“to continue to public health measures”(emphasis is compensable, whether employees implement the requirements of the in original). Continuing, the majority may be required to pay the cost of the ETS.”Minnesota OSHA also cautioned explained that“although COVID-19 is test itself (spoiler alert, in Minnesota, that it would continue to enforce all a risk that occurs in many workplaces, probably not), how will a sufficient employer obligations under the general it is not an occupational hazard in number of tests be procured, where and duty clause and its general standards. most”(emphasis in original). Thus, how will the tests be administered, how Key Takeaways will proof of vaccination be gathered, the majority held, allowing OSHA to regulate broadly“the hazards of daily While the ETS has been withdrawn, how will test results be reported, living”would expand OSHA’s authority Employers are not out of the woods. and how this data will be secured. beyond the bounds Congress set for it. Employers should consult with Experienced legal counsel can assist in counsel to discuss OSHA’s recent answering each of these questions. In response to this decision, activity and statements as applied In the end, following the Supreme effective January 26, 2022, to their workplace, as well as what Court’s January 13 ruling, employers OSHA withdrew its ETS. safety practices they should consider now have greater freedom to design What Does This Mean for Employers? in view of the ongoing challenges a COVID-19 safety plan that takes Despite withdrawing the ETS as an posed by the COVID-19 pandemic. into consideration the dynamics enforceable standard, and effectively There are some things, however, that of their particular workforce. ending the current round of ETS remain clear. For example, the Supreme litigation, OSHA emphasized that Court’s ruling did not bar vaccination 14 Minnesota Grocer Spring 2022
During good times, it’s easy to keep a steady hand. But when life throws curve balls like the world has never seen, those steady hands can become shaky rather quickly. At Associated Wholesale Grocers, we have thousands of examples of strong, steady hands keeping grocery stores running, true purveyors of hope for our communities. And there are thousands of steady hands at AWG supporting those ESSENTIAL pillars of communities in the 28 states we serve. We’ve been constantly tracking how our industry is changing and we’re focusing even closer on how the current situation will change things even more. We have long prided ourselves on the lowest cost of goods. But now, and in the future, our retailers need far more than that. Everything from e-commerce to merchandising, digital marketing to support as we navigate through any crisis together. We have helping, steady hands for every area of your store and have prided ourselves on being that steady hand for almost 100 years. For a lower cost of goods PLEASE CONTACT: Keith Knight 615-290-6093 Diane Guerrero 262-806-1203 Kip Mcilwain 320-293-6337 AWG_Minnesota Grocers
YOUR FULL SERVICE REFRIGERATION CONTRACTOR SINCE 2005 Solid Refrigeration is your complete commercial grocery store and refrigerant based industrial site Minnesota contractor. We offer 24 hour - 7 day a week regular and emergency service with truck and site inventory to get you up and running faster. No job is too big or too small for our highly trained technicians and office staff with over 100 years of refrigeration experience. Let Solid Refrigeration put together a turnkey refrigeration design and installation package to meet your growing needs. Photo Left shows a recent Solid Refrigeration rack installation at Jerry’s Foods, Eden Prairie Photo Lower Right is a custom installation of a salad bar line up at Jerry’s Foods, Eden Prairie Full size fleet to meet your customer needs. Solid Refrigeration specializes in energy management based on store design to lower operational costs to help your bottom line. Solid Refrigeration works with energy providers like Excel Energy to maximize your rebate potential. Before you upgrade your existing equipment, feel free to contact us on how creative selections like reach-in doors can put more money in your pocket through energy rebates. Photo Left energy save R/I doors in use at Jerry’s Foods, Eden Prairie Photo Lower Right is a custom seafood department at Jerry’s Foods, Eden Prairie Commercial Refrigeration 1125 American Boulevard East Bloomington, MN 55420 24 Hour Refrigeration Service Number - (952) 854-2850 Installation and Energy Management - (952) 854-2850 Equipment Sales - Monie Kocher - (612) 468-1115
Hugo's_MGA Spring Ad 2022.pdf 1 1/17/2022 9:06:29 AM C M Y CM MY CY CMY K 2022 Capitol Outs Stay informed with biweekly conference calls during the Minnesota legislative session. Capitol Check Outs are a great opportunity to educate and engage. Capitol Check Outs are a 30-minute update given by the MGA Government Affairs Team. They provide interactive, pertinent and up-to-the-minute legislative information. Calls are every other Friday at 9:00 am, starting on February 18 and running through May 2022. Contact Steve Barthel at sbarthel@mngrocers.com or 651-228-0973 for more information.
RETAIL FORECAST 2022 Choppy waters; favorable winds By Phillip M. Perry R etailers face a more challenging it remains decidedly sunnier profits spiked 36%. Heftier earnings operating environment in than the 3.4% pandemic-fueled should help companies weather the 2022. After a year in which decline of 2020. (GDP, the total of coming year’s array of challenges. pandemic-sequestered consumers the nation’s goods and services, “Corporate profit margins have been spent heavily on merchandise for is the most commonly accepted running somewhat above their five- the home, they are now expected measure of economic growth. year average of 11.1%,”notes Yaros. to shift a greater portion of their “Real” GDP adjusts for inflation.) “That should provide some ability disposable income to restaurants, Headwinds, of course, are to absorb price pressures that have theaters and travel—services that inevitable. The coming 12 months developed from rising commodity COVID-19 had largely put off limits. will have their own troubling mix: prices and global supply chain issues.” “Our current 2022 forecast is for The peekaboo pandemic. Labor Clearly, everyone is glad to bid 4.5% increase in core retail sales,” shortages. Crippled supply chains. adieu to the pandemic-battered 2020, says Scott Hoyt, Senior Director of China tariffs. Nascent inflation. An when corporate profits declined 3%, Consumer Economics for Moody’s unsettled consumer. Yet economists and they are looking ahead to better Analytics (economy.com).“That do not expect negatives to prevail. times.“Our members are optimistic represents a historically average “While the Delta variant is continuing and expect current levels of demand growth rate. Service spending, in to do some damage, we expect to continue well into 2022,”says contrast, is expected to grow by this wave of the pandemic to soon Palisin.“They're expecting to continue 9.4%.”(Core retail sales exclude the subside and for any future waves to to hire, as well. Our annual wage volatile auto and gasoline segments.) be successively less disruptive,”says and salary survey usually projects While the 2022 retail sales forecast Yaros.“Labor and goods shortages between 400 and 500 job openings represents a considerable drop from will ease as the domestic and global for the coming 12 months. Now, the 16.2% spike expected when economy increasingly learn how to though, the number is more than the previous year’s numbers are live in a new pandemic normal.” a thousand. So we're looking at a finally tallied, it is also fairly robust Companies rebound doubling of the usual hiring activity.” given the difficult year-to-year Business owners tend to confirm Aggressive hiring is improving comparison. Helping to generate the economists’ sunny reports.“Most the nation’s employment level, a sales will be strong tailwinds from of our members have seen a healthy key driver of retail sales and of the growing employment, rising wages, return of revenues and are doing consumer sentiment so vital to the a booming housing sector, Federal about 90% of their pre-COVID nation’s overall business health. infrastructure initiatives, and business,”says Tom Palisin, Executive “Unemployment has been declining aggressive corporate investment. Director of The Manufacturers' pretty steadily,”says Hoyt.“Jobs are “The nation is in the midst of Association, a York, Pa.,-based regional being added at a rate that prior to an early economic recovery after employers' group with more than the pandemic would be viewed as the body blow of COVID-19,” 370 member companies (mascpa. astoundingly good.”Unemployment says Bernard Yaros Jr., Assistant org). With its diverse membership in is expected to be as low as 4.6% Director and Economist at Moody’s food processing, defense, fabrication, when 2021 figures are finally tallied, Analytics.“Though growth will and machinery building, Palisin’s and should decline to 3.5% by the decelerate in 2022 due to fading association is something of a proxy end of 2022, a level not far from effects from business re-openings for American industry.“Many have the“full employment”conditions and past fiscal stimulus, the actually gone into hiring mode.” of the pre-pandemic economy. economy will remain robust.” Moody’s Analytics expects Any tight labor market is likely to The numbers tell the tale. Real corporate profits nationally to increase spark wage hikes that put money GDP (Gross Domestic Product) by some 4% in 2022. While that in shoppers’ wallets and drive should grow at a 4.3% rate in 2022, figure might seem unremarkable positive consumer sentiment. Today’s according to Moody’s Analytics. in isolation, it (again) represents economy is no exception.“We have While that pace is a bit less aggressive an enviable performance over seen a significant increase in wages than the 5.8% of the past 12 months, difficult 2021 comparisons, when over the past year--as high as 20% 18 Minnesota Grocer Spring 2022
to 25% for lower hourly entry-level buying new equipment,”says ahead.“Annual growth in housing employees or machine operators,” Palisin.“We are seeing a special starts will remain strong because says Palisin. Nationwide, increases are uptick in the automation category of favorable demand-side factors, running lower, due to normalization because of the labor supply issue.” namely demographics and excess of wages in some industries.“In 2022 Nationwide, the picture is the savings,”says Yaros. Increases for we're looking at 2.6% growth in the same. Moody’s Analytics expects 2022 are expected to top 11.9%- employment cost index, compared capital investment to increase 8.2% -very aggressive by historical with 2.9% for 2021 and 2.6% in 2020,” for both 2021 and 2022, another standards and slightly higher says Hoyt. (Economists consider welcome rebound from the 5.4% than the previous year’s 10.6%. the“employment cost index”as decline of 2020. Companies are giving Eager consumers are bidding up the best measure of actual wage a lot of attention to bolstering their the prices of single-family homes, rates). Hoyt adds that “any risks intellectual property infrastructure. and a general easing of mortgage to the accuracy of those numbers “Investments in information lending standards is helping grease is probably on the upside.” processing equipment and software the skids. Housing prices for 2021 Wage rates aren’t the only is well above its pre-pandemic level are expected to jump 17.5%--a component of an employer’s labor as businesses have boosted their IT considerable improvement over the cost. Toss into the mix a greater budgets,” says Yaros. Higher energy previous year’s 10.4%. As for 2022, number of people employed, a prices have also fueled aggressive Moody’s Analytics expects increases greater number of job positions investments in mining exploration, to decelerate to 4.6%, thanks to filled, an increased number of shafts and well structures. difficult year-to-year comparisons. hours worked, and the total comes The economy should also benefit Scarce workers to what economists dub “wage from more spending on commercial The generally favorable economic and salary income,”And it’s clear structures.“We're going to see more forecast is not without its clouds. that employers nationwide will be non-residential construction next As most retailers will attest, today’s shelling out more of that in the year,” says Bill Conerly, Principal ambitious hiring initiatives are coming 12 months.“In 2022 we're of his own consulting firm in Lake colliding with a scarcity of candidates. looking at about 4.6% growth in Oswego, Oregon (conerlyconsulting. “Our members are having difficulty wage and salary income, coming off com).“It will be strongest probably finding enough workers, especially a 7% increase in 2021, which was in warehouses and light industrial, for entry-level jobs,”says Palisin. up from 1.3% in 2020,” says Hoyt. but also suburban offices. Early “The average time-to-hire has All that additional income should indicators, like the Architectural doubled from what it was prior to the encourage greater spending by Billings Index, are looking positive.” pandemic. This will certainly impact shoppers. And signs are that people This will be a welcome change over our member’s ability to take on new have saved up considerable sums of recent flat activity, which Conerly work or provide on-time delivery.” cash ready to be spent. Throughout attributes to the long lead times Nationwide job openings recently 2020 and early 2021, after-tax income characteristic of such projects, and topped a record-shattering 11 rose much faster than had been a scarcity of new initiatives in the million—a huge increase over the anticipated prior to the pandemic. early days of the pandemic.“Early in 7 million pre-pandemic level.“The The reason was a massive fiscal 2020 nobody was signing papers to number one concern of businesses stimulus in terms of federal economic acquire land or do new projects,”he going forward will be finding qualified impact checks and expanded says.“So what we see going on now labor,”says Yaros.“There have never unemployment insurance payments. are projects that were planned pre- been so many open positions across At the same time, consumer pandemic or with short lead times.” every industry and government, spending ran lower than anticipated. Fueling the trend: Ready money. but the need for more workers is “People now have a huge amount “For the most part our companies are especially acute in manufacturing, of savings,”says Hoyt.“Furthermore, able to access funds for hard capital transportation, educational services, consumer credit card borrowing investments and lines of credit,”says healthcare, and leisure and hospitality.” has been weak, leaving consumers Palisin.“Financing has loosened up more flexibility to borrow money The reasons for the scarcity are since a year ago when everybody going forward if they choose to.” diverse.“There has been a significant was in a high state of uncertainty.” drop off in labor force participation Construction activity On the residential side, housing as folks were forced into retirement Retailers benefit when businesses starts have been running about 15% or are staying home to deal with invest in capital improvements, higher than pre-pandemic levels, childcare or other dependent care and here the reports are favorable. according to Moody’s Analytics. issues that are more difficult to “Our members in general are Buyers of new homes tend to shop a handle in the current environment,” expanding, building new warehouses lot at retail stores, and the prediction says Hoyt. Some fear the risk of and manufacturing facilities and for the housing industry is full steam Continued on next page Minnesota Grocer Spring 2022 19
Retail Forecast 2022 continued from previous page workplace infections. Others are not “In fact, given the friction between Given favorable wages and finding exactly the job they want. the US and China, it's possible we income trends, one might expect And many pandemic-shocked people could even get additional ones.” that consumers are feeling fairly are reassessing their life missions The double whammy of supply good. In the closing months of 2021, and pursuing new ventures. chain disruption and China tariffs are though, the attitude of the American A number of factors may help causing some businesses to look at public was surprisingly unsettled. relieve the labor crisis in 2022. alternative regional or local sources. “It really is difficult to get a good These include the end of bonus “Many businesses are no longer sense of consumer confidence in unemployment insurance, a declining relying on any single supplier or the current environment,”says Hoyt. effect from stimulus payments, global region for goods and services,” One reason, of course, is the unclear an abatement of infections, and a says John Manzella, a consultant on path of the pandemic. But another return to in-person schooling. global business and economic trends, is the recent spike in fuel and other East Amherst, NY (JohnManzella. prices, sparking fears of inflation. Supply chains com).“They are building more How the public reacts to the The tight labor market is helping diversified and reliable supply chains. shape-shifting virus should be more fuel another retail headache: a global Instead of buying in scale from two apparent in the opening months breakdown in the efficient distribution very large Chinese suppliers, they of 2022. So should changes in of goods.“The most important might buy in smaller increments the currency’s purchasing power. problem for retailers is a supply chain from a half dozen suppliers located “Inflation will be the key financial which is still broken,” says Bob Phibbs, in different regions of the world. statistic to follow early in the year,” a retail consultant in Coxsackie, NY They may also utilize more long- says Yaros. Moody’s Analytics calls for (retaildoc.com).“Smaller operators term warehousing facilities. This the Core PCE Price Index (month- who lack buying clout are finding it strategy, which adds costs but reduces to-month inflation) to moderate to especially difficult to get product.” risk, will be extremely beneficial 2.3% in the fourth quarter of 2022 A lack of sufficient workers is in protecting against the next as supply-chain bottlenecks and often the root cause of supply chain pandemic, black swan, or trade war.” labor shortages ease. (The Core disruption. When people aren’t PCE Price Index excludes energy Finding alternative sources, available to do the work, efficient and food prices and is the Federal though, can be easier said than production and transportation Reserve’s preferred measure of done.“Many businesses that would fall by the wayside. Retailers are inflation). Businesses should watch like to source domestically can't hurt when cargo ships pile up for any higher levels of persistent find any vendor in the United at ports, causing delivery delays inflation that might cause the Fed States that can match Chinese and leading to widespread to increase interest rates—a move prices,” says Conerly.“And Chinese price increases for supplies. Moody’s Analytics does not anticipate companies have improved the Delivery disruptions may quality of their goods significantly.” until the fourth quarter of 2022. persist for some time.“Recently a Yet another leading indicator Adding to this litany of woes is the vendor told me they didn't expect will be the return-to-work trend. Chinese government’s increasingly production to be back to where it “More people getting back on the heavy-handed control of industry, should be until the middle to the job would confirm a strong 2022,” says Palisin.“Some of our members end of 2023,”says Phibbs.“And says Conerly.“Are employers getting are asking, ‘If we have a critical the prices for components have the workers they need? Are people supplier in China, how likely is it gone up so much that in many earning more money to spend?” that the government will step in cases it is no longer profitable to and intervene in that company, Finally, one nonfinancial force may keep making some products.” which could impact us getting be more important than anything The increased costs resulting access to our components?’” else.“The damage done by the from order backlogs and delivery Delta variant has taught us that the The year ahead delays are only exacerbated by the pandemic is still alive and has the China tariffs. While retailers were As retailers enter the early potential to disrupt economic activity,” expecting some relief from the months of 2022, economists suggest says Hoyt.“Early in 2022 the leading Biden administration, so far there watching a number of leading data will be about COVID-19. What has been no move to change the indicators for an idea of how the are the trends in vaccination rates? status quo.“Tariffs on Chinese goods year will go. The first is the state Infections? Hospitalizations? Deaths?” will likely continue,” says Conerly. of consumer confidence—a vital driver of cash register activity. Favorable answers bode well for robust retail sales. 20 Minnesota Grocer Spring 2022
Learn more about our support of Farm and Family at
CELEBRATING 125 YEARS Conversations with the MGA In honor of celebrating our 125 years of advancing the food industry of Minnesota, you will see a variety of articles throughout this year’s Minnesota Grocer magazine. We will take walks down memory lane, visit with the MGA Team, and talk to our members. These will be a great showcase of our amazing association and its history. How can our members utilize the MGA to strengthen the voice of industry? Let’s start with The Minnesota food industry is multi-dimensional – a Karly Ackerman, our Membership/ lot is going on beyond your front doors. We know our Communications Manager members don’t have the time and kackerman@mngrocers.com personnel to showcase their hard work every day. As your association let us be your hype person! We can take your company stories and How long have you been at the MGA? blast them out on our social media @MNGrocer I am celebrating six years with the Minnesota platforms. This lifts your business and Grocers Association, having been promoted to the the food industry in general. A great win-win for all! Membership/Communications Manager three years Also, I would be remiss if I didn’t speak to the underlying ago. Looking back at my history with the MGA it’s importance of our media resource presence. Allowing a mere drop in the bucket when compared to the us to showcase your great work directly benefits our legacy our association holds in advancing industry for Government Affairs Team and the vital work they 125 years. My areas of responsibility have expanded do at the Capitol. Member participation is seen by during my tenure and it has been exciting to see legislators and gives credibility to our voice. Working such positive growth in support and participation. together expands our presence in a significant space. Why do you believe In your tenure what has been one participation in the of your best memories? MGA is so important? One great memory was being a part of the MGA team The MGA is the only that transitioned and moved to our new office. The MGA state trade association had been at the previous building for 30 years and it was working on behalf time for a refresh. It was a lengthy and labor-intensive of the entire food task to go through and pack dozens of filing cabinets industry. As a company that does business in Minnesota, that held so many stories. This is a you, our members, understand the complexities it testament to the MGA’s amazing takes to succeed. We need all members to participate history - it was humbling to see in our yearly opportunities. We have a multitude of the magazine and newspaper member benefits such as four quarterly Minnesota archives from decades ago and Grocer magazines (which is nearly 75 years old) on see how we have evolved (see topical industry trends and twelve monthly Grocers sidebar). There was a history lesson Frontline newsletters, plus informational webinars, for some of us at the MGA when and peer events to create lasting industry relationships. we uncovered Rolodexs, pagers, typewriters, credit These resources keep you informed on all industry card imprinters, hand ledgers, and a folding machine news, not just in Minnesota, but nationwide. – thank goodness for the 21st century. 22 Minnesota Grocer Spring 2022
How it Started Where We're At MGA Publications Member-wide 1950s quarterly publications introduced Monthly 1970s newsletter begins giving the What brings you pride in membership your work at the MGA? timely updates The majority of our members work with community partners for the greater good every day. I am so proud to manage the MGA’s annual Bag Hunger Campaign. Newsletter This is a fantastic program that highlights 1990s the great work of our industry and becomes showcases the power we have when "Frontline" - adds we work together. The 14-year history legislative and of bringing vendor and retail members regulatory together elevates the importance of our collective work – not to mention the nearly 41 million meals we have provided to our neighbors in need. The grocery 2000s industry looks to What do you enjoy about being a part of the MGA? the future during I enjoy connecting with our members. the new The MGA membership has been millennium nothing but kind and respectful in our interactions. There is no better feeling than walking into a The MGA refreshes grocery its image and store and expands industry being Today welcomed expert articles with open During the arms (literally). I find myself walking through challenges of the the aisles of the grocery store looking global pandemic, for our members’ products and seeing if the MGA led there is anything new. I never thought of industry myself as a food person but my time at the MGA has shown me how much of a privilege it is to know my local grocer and where my food is coming from. Minnesota Grocer Spring 2022 23
People, Stores, Companies Hy-Vee, Inc. launched a Lunds & Byerlys, Edina, new private brand, Hy-Vee’s Good MN offers same-day pay for Graces, to make a gluten-free diet workers who want it. This flexibility more attainable for shoppers. will help when and how often employees want to be paid as a LaCrosse, WI-based Kwik Trip, Inc. perk to attract more workers. hit the milestone of 800 convenience stores. With the opening of its newest Cub Foods presented Second location, Kwik Trip has doubled its Hermantown, MN-based Harvest Heartland with a check store count in eight years. Super One Foods and St. Paul, MN- for $167,000 which represents a based KEMPS partnered together year of campaign donations. to donate one pallet of shelf-stable Continuing their long- milk, The Giving Cow to Second standing relationship with the Harvest Northern Lakes Food Bank. Teal’s Market recorded Damiano Center, Miner’s, Inc. donations of nearly $60,000 presented their annual donation to non-profits throughout the which supports the Kid’s Kitchen. For more than 20 years communities it serves. These This provides nutritious meals and Kowalski’s Markets has partnered donations are made through its space for children after school and in with KARE 11 and the U.S. Marine 1% rebate program for guests. the summer. Corps for their annual Toys for Tots Campaign. This year included a new coupon incentive for donations. Nashwauk Market contributed grocery bags to the Neighbors Helping Neighbors Food Shelf for local families affected by the COVID-19 pandemic. Fareway Stores, Inc. hosted a ribbon-cutting ceremony for its Spirits & More J&B Group concluded their store in Owatonna. The more than 2,500 square foot store addition will provide for Spirit of Giving celebration and a variety of wine, craft beer, an expanded liquor selection, as well as other specialty reported over $7,300 in food drive and exclusive items. donations and over $34,000 in toy drive donations along with over 100 Leech Lake Market in Cass Lake, toys and other food items collected. In partnership with the MN held a ribbon-cutting for their Wyoming Police Department and the newly renamed store. After opening North Branch Police Department, 79 years ago, Teal’s Management Bruce’s Foods in Wyoming and sold Teal’s Market in the fall of 2021. North Branch County Market helped collect over 5,000 lbs of food for the North Branch Food Shelter. Saint Paul Park-based Simek’s reported approximately 1.2 million Cub Foods is committed to meals were donated through its lifelong learning and in December collaboration with Feeding America. all store directors and office leaders For every Simek’s product purchased, graduated from a 16-month custom the company donates a meal in the KEMPS, St. Paul, MN, presented leadership corse. This was in community where it was purchased. the Ronald McDonald House of partnership with the University of Rochester, MN with a donation Southern California. of $10,000 and a variety of ice cream for children and families. 24 Minnesota Grocer Spring 2022
People, Stores, Companies Hy-Vee, Inc. announced the retirement of Jay Marshall, Vice Chairman and President of Hy-vee Jeremy Supply Chain and Gosch Subsidiaries as well as Mike Skokan, Executive Vice President, CFO, and Treasurer. Coborn’s, Inc. celebrated the grand opening of its Buffalo, MN store. This location Following these retirements, Hy- marks the 60th grocery store in the company’s retail portfolio. Vee has announced the promotions of Jeremy Gosch to President and Chief Operating Officer; Aaron Cub Foods, Wiese, to Vice Chairman of Hy- Patrick Miner, President of Stillwater, named Vee, Inc., and president of Hy-Vee Miner’s, Inc., met with other local Dan Triplett as supply chain/subsidiaries; and Andy businesses and U.S. Representatives Vice President of Schreiner to Senior Vice President, Pete Stauber and Tom Tiffany to Merchandising. He Chief Financial Officer, and Treasurer. discuss supply chain shortages and had previously served as Cub’s their impact on the industry. Director of Produce and Floral before taking a leadership role at UNFI. In partnership with the Salfer’s Food Center in Pinky Swear Foundation, Hy-Vee, Wabasso and B & D Market in Inc. raised more than $219,000 at Hy-Vee, Inc. launched its Oliva partnered with Weelborg its register roundup event during RedBox Rx, a new national subsidiary Ford for their annual Freezin’ for the holiday season. The money that offers low-cost telehealth and Food event during the holiday raised helps children with cancer online pharmacy services. RedBox Rx season. This years’ event collected and their families by providing provides quick and easy access to a over 15,135 combined pounds financial and emotional assistance. provider and allows prescriptions at no charge directly to the patient. and dollars in donations – which support multiple local food shelves. Ankeny, Iowa-based Casey’s General Stores, Inc. has named Fareway Stores, Inc., Boone, Katrina Lindsey as Chief Legal Through its partnership IA, announced cash bonuses to Officer and Corporate Secretary. with RePurpose Global, Simek’s all hourly employees for going announced it removes from the above and beyond during the year. environment the equivalent Fareway Stores in The bonuses range up to $500 per amount of plastic that is used in Owatonna presented a donation employee and will impact more than its packaging at the shipping of of over $1,000 to the Two Rivers 10,000 frontline staff members. products. More than 17,500 pounds Habitat for Humanity. Every of plastic have been removed since dollar raised went to the two Miner’s, Inc. accepted a the launch of the partnership. homes being built this year. certificate of appreciation from Second Harvest Northern Lakes SpartanNash, Grand Rapids, Employee-owned Lueken’s Food Bank for their continued MI announced the promotion of Village Foods, Bemidji, MN support to the community. Amy McClellan to the SVP and celebrated its Bemidji South remodel Chief Marketing Officer and Ileana with a grand reopening which McAlary to the new SVP, Chief included treats, deals, samples, Legal Officer, and Corporate Strategy. and giveaways for all guests. After 40 years in the same location, Zup’s in Ely, MN opened its doors to the newly renovated Ely Northland Market. Shoppers will have the benefit of a 35,000-square-foot, full-service, modernized grocery store, complete with dry goods, expanded sausage factory, a separate liquor store, and the return of a second pharmacy in the community. Minnesota Grocer Spring 2022 25
People, Stores, Companies Miners, Inc., presented a Coborn’s, check to the Solvay Hospice Inc. announced House for the funds raised the promotions of during their holiday key leaders in the donation drive. Customers company. Dave raised over $18,000 during Dave Meyer Meyer has been this month-long fundraiser. named President of Coborn’s Kwik Trip, Inc. guests will either Inc. in addition to his role of Hy-Vee, Inc. announced it have to pre-pay or pay at the pump Chief Operation Officer. He will has adopted the Seafood Supplier for their fuel purchases. They will still oversee store operations, human Code of Conduct and pledged to be able to use cash or checks to pre- resources, fresh and center store work with seafood suppliers that pay inside with the ability to get a merchandising, and marketing. Troy share its beliefs in quality products, refund after filling up. Gift cards offer Vosburgh has been named Vice environmental responsibility, another alternative to debit or credit President of Operations-Eastern and fair labor standards. cards, allowing guests to pay for the Region. Emily Coborn has been exact price of their fuel without a named Vice President of Retail UNFI announced its 2021 hold placed on their account. Services and will oversee Pharmacy, Master Marketer Awards. Chris’ Liquor, and E-commerce Operations. Food Center in Sandstone won Stillwater, MN-based Cub Foods Marti Sunderlin has been named awards for extra effort advertising announced a partnership with Vice President of Centerstore and and public service/community. CitrusAd, a technology platform Fresh Merchandising. Sarah Putnam Cub Foods in Stillwater earned that provides personalized has been promoted to Senior two awards for TV commercials shopping based on preferences Director of Fresh Merchandising, and website/social media. Duluth and purchase history. The company overseeing Deli, Bakery, and Super One Foods won an award in has also started its own online Floral. Jenn Weisgram has been the fresh department and Hibbing pickup and delivery services. promoted to Senior Director of Super One Foods won an award Customers enrolled in its loyalty Fresh Merchandising, overseeing for grand opening/anniversary. program will be able to get similar Produce, Meat, and Seafood. Amy benefits as if shopping in stores. Petersen has been promoted to Social Media Strategist overseeing the growing needs in social In partnership with the media and content strategy for U.S. Marine Corps on the annual the company’s retail locations. Toys for Tots Campaign, Fareway Stores, Inc. raised nearly $355,000. Minnesota Pork Producers This campaign provides toys to Association CEO David Preisler children during the holiday season. was presented with this year’s In addition, more than 110 pallets of Distinguished Service Award at In partnership with other local toys were collected and donated. AgriGrowth’s annual Minnesota Ag businesses, S & R Quisberg, Inc. & Food Summit. participated in the Holiday Food Basket Program to raise money for families in Send us your news! need during the holiday season. This Please contact us with your was the most successful year in raising news so we can share your story in this section. _ = MGA Members Make over $36,000. A Difference Minnesota Grocers Association c/o Karly Ackerman Teal’s Market _ = Wellness Promotions 1360 Energy Park Drive announced the Ste. 110 = Sustainability Efforts promotion of St. Paul, MN 55108 Donna Potter as Telephone: 651-228-0973 or = Capitol Engagement the Store Manager 1-800-966-8352 at Paynesville, MN. Fax: 651-228-1949 = Congratulations E-mail: kackerman@mngrocers.com 26 Minnesota Grocer Spring 2022
You can also read