STAR GAZING AROUND GROCERY - Alabama GROCERY FRAUD - Alabama Grocers Association
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Alabama GROCERY FRAUD PAGE 30 THE STRUGGLE OF COURAGEOUS LEADERSHIP PAGE 36 2019, ISSUE 2 ALABAMA GROCERS ASSOCIATION STAR GAZING AROUND GROCERY page 24
CONTENTS | ISSUE 2 FEATURES COLUMNS President’s Message Happy Spring!. . . . . . . . . . . . . . . . . . . . . . . . 6 26 Chairman’s Message Great Things to Come in 2019. . . . . . . . . . . 9 Stargazing Around Grocery: Inmar Insights into 2019 From increased automation to greater shopper autonomy, 2019 will see accelerating Government Relations change across virtually every facet of the grocery industry. Legislature Returns After Passing Special Gas Tax. . . . . . . . . . . . . . . . . . . . . . 11 Inside the Beltway Now Is The Time to Become a Grocery Industry Advocate. . . . . . . . . . . . . . . . . . . . 20 30 Washington Report 36 Five Trends to Watch in 2019. . . . . . . . . . . 21 Grocery Fraud: Or How A Stapler Can Rob You Blind Viewpoint What’s your battle plan against the forces of grocery fraud? Do you have adequate intel Bread & Metaphors. . . . . . . . . . . . . . . . . . . 22 and situational awareness to win the war? Mommy Blogger The Little Things That Keep Moms Coming Back. . . . . . . . . . . . . . . . . . 42 DEPARTMENTS 36 AGA News. . . . . . . . . . . . . . . . . . . . . . . . . . 14 Outside the Box. . . . . . . . . . . . . . . . . . . . . 24 The Struggle of Courageous Leadership As a leader, an essential (and often unspoken) part of your job is continuing to “hold space” for the positive opportunities ahead, even when the circumstances are frightening. 32 14 AL A BA M A GRO CER | 3
AGA | BOARD OF DIRECTORS executive Chairman of the Board Immediate Past Chairman Treasurer Sergeant-at-Arms Frank D'A mico, III Peter "Greg" Gregerson Jay Mitchell James Cochran committee BTC Wholesale Gregerson's Foods Mitchell Grocery Corporation Buffalo Rock Pepsi Cola Company Vice Chairman Past Chairman Secretary Johnny Collins Jack Howell Bo Taylor Dean Foods Forster & Howell Coca-Cola Bottling Company United, Inc. vice presidents David Bullard Bob Crawford Bill Davis Harold Garrett Piggly Wiggly Alabama United Johnson Brothers of A&R Super Markets Gateway Foods Distributing Company Alabama Wade Payne Food Giant directors Naseem Ajlouny Mike Coggins Kris Jonczyk Austin Peake Buy Lo Quality Foods Sherwood Food Distributors Publix Super Markets, Inc. Peake & Associates Stan Alexander Chris Crosby Kenneth Jones Eddy Quinley Associated Grocers of the South Golden Flake/Utz Snack Rouses Enterprises Advantage Solutions Danny Babb Larry Garrett Melanie LeBlanc Brian Smith Associated Wholesale Grocers Vietti Foods Anheuser-Busch Community Coffee Jack Carlile Kevin Gillespie Curtis Lyons, Jr. John Wilson SuperValu Kelley Foods Flowers Bakeries Super Foods Supermarkets Kirk Clark Julie Anderson Goolsby Mike Oakley Jimmy Wright Mitchell Grocery Corporation The Hershey Company Alabama Power Wright's Markets ex-officio board Mike Fuller R. Kevin Miller Mac Otts James Scott members Fuller's Supermarket "Official Board Photographer" Autry Greer & Sons Lighting Specialists Acosta Sales & Marketing Board of Trustees Chairman Vice Chairman President Secretary/Treasurer Bob Crawford Phillip Davis Ellie Smotherman Taylor Paul Burnett United Johnson Brothers A&R Supermarkets Alabama Grocers Association Byars | Wright of Alabama Jeff Bolas Gerry D'A lessandro Bubba Lindley Cliff Thomas Bunzl Distribution Fourth Avenue Supermarkets EdLinco Campbell Snacks Dana Bowen Jai Freeman Rob Renfroe Chris Woods Frito-Lay Freeman Foods Renfroe Foods Retail Data Systems Tim Cano Ken Hestley Don Richardson Post Holdings Sell Ethics Coca-Cola Bottling Company United, Inc. 4 | AL AB AM A G R OC E R
PRESIDENT’S MESSAGE Happy Spring! EL L I E S M OT H ER M A N TAY LO R PR E S IDE N T ALABAMA GR OCER S AS S OCIATIO N we are moving full steam ahead as we head into privatization. Please check your Market Minute each week to see the full list and spring! call our Association office if you have any questions or concerns. March began with a very successful Buy This is such an important statistic to On Monday, March 18, I had the privilege Alabama’s Best Press Conference on the communicate to legislators as we begin of speaking on behalf of the AGA in Capitol Lawn in Montgomery. the 2019 Legislative Session. a Press Conference announcing the Over 500 were in attendance with Speaking of the Legislative Session, it has beginning of eWIC in our state. This Governor Kay Ivey and Agriculture been a world wind. The first two weeks has been a decade long process with the Commissioner Rick Pate as our featured were consumed with the Rebuild Alabama first meetings literally beginning in 2009 speakers. At least seven media outlets were Gas Tax called in a special session by discussing whether our state would be present, and we were extremely pleased Governor Kay Ivey. online or offline. with our outreach to help consumers Only 26 out of the 140 legislators voted Each month more than 120,000 Alabama identify products headquartered, against the 10-cent gas tax increase that participants at nutritional risk receive produced, or manufactured in our state. will raise an additional $300 million WIC benefits and there are currently Alabama food product sales have a $2 per year and it only took the minimum 638 WIC authorized stores. In 2018, $97 billion impact on Alabama’s economy, required 5 days. million in food instruments were issued at tax base and along with the food service The first 6 cents of the tax will take the stores statewide. industries employ one out of every four gas tax from 18 cents to 24 cents a gallon Press Conference speakers included Alabamians. starting on September 1 and then add 2 Dr. Scott Harris, State Health Officer, The food retail industry in Alabama cents a year for the next 2 years. Alabama Department of Public Health; provides over 70,000 jobs with over $2.2 The regular session resumed on Tuesday, Amanda Martin, Alabama WIC Program billion in annual wages paid. Grocers pay March 19 and so far, we are following Director; Stacey Neumann, WIC Vendor over $1.2 billion in state taxes and have bills on everything from our Sunday Management Director and eWIC Project a total economic impact on the state’s sales initiative to service animals to Manager and myself. economy of over $12 billion dollars. SNAP requirement restrictions and AGA was proud to partner with the Alabama Department of Public Health, “As always, my door is always open. WIC Division on the planning and implementation of eWIC in our state. For please don't hesitate to give me a call retailers and WIC participants, e-WIC will be a tremendous improvement to with any questions or concerns.” the overall shopping experience with 6 | AL AB AM A G R OC E R
smoother transactions at the register, on our normal benefit schedule of the streamlining of processing, and reduced 4th through the 23rd. I think retailers check out times. and wholesalers across the state can now, The rollouts will continue throughout the more than ever, appreciate the work our state in the coming months and finalize Association did on SNAP expansion and in August 2019 with the Southeastern, what that truly means in the marketplace. Mobile and Southwestern Districts. As always, my door is always open. Please Last, but certainly not least, we will finally don’t hesitate to give me a call with any be recovering from the government questions or concerns. shutdown regarding SNAP. As you all Happy Spring! know, March benefits were distributed on March 4th, and April benefits will be given as normal April 4th through 13th. Those normally distributed April 14th though 23rd will move their benefits to April 13th. May will finally get us back 201 9 A s so c iat io n Dates • J uly 29-31, 2019 – A l abam a G r o c er s Asso c ia tio n Annua l C o nv e ntio n - S ande st i n Go lf & Be a c h R e so r t, D e stin • Oc tob er 23, 2019 – A l abam a' s Fo o d Ind ustr y Fine st Lunc he o n, T h e C lub , Bir m ingha m • Oc tob er 24, 2019 – A l abam a G r o c e r s Ed uc a tio n Fo und a tio n Fa ll Go lf O uting - AL A BA M A GRO CER | 7
CHAIRMAN'S MESSAGE Great things to Come in 2019 F R A N K D'A M I CO, I I I BTC WHOLES ALE DIS T R IBUTOR S AGA CHAIR MAN OF THE BOAR D Association Office. We need all types of It's hard to believe we're already closing the books items this year and with the full support on the first quarter of the year, yet here we are. of the Association we will be able to raise more money for the Foundation and It is the time of year for the weather to from vendors and enjoy top name scholarships. start warming up, spring vacations to speakers and entertainers. The Board of Trustees is also in the start and for your Association that means You can get involved by exhibiting, process of reworking the Tuition busy season is in full swing. advertising in the convention annual, Reimbursement Program to roll out to There are so many great things to tell you sponsoring an event and/or attending the the Membership. This Program is for about, Ellie is going to tell you about the convention itself. If the AGA Convention employees of AGA companies that would exciting things we have already done like is not on your calendar, it should be. like to take some additional courses to the Buy Alabama’s Best Press Conference, Convention is July 29-31 at Sandestin Golf help them grow their grocery careers. You eWIC Pilot and SNAP. The Association & Beach Resort. could use this reimbursement for classes lobbyist, Patrick McWhorter, is going to For those of you who love Sandestin and in Microsoft, Finance, Management, catch you up on the Legislative Session in want to spend a few extra days, your Marketing, or Retail Management Classes. this magazine. Association Office negotiated a deal with Employees are eligible to receive up I would like to focus on the Association's Sandestin that if you stay 6 nights you to $200 of tuition reimbursement per largest fundraiser, the Annual Convention get 25% off the AGA rates. Now you don’t course. Each employee may receive and some of the great things we are have an excuse to stay an extra day with up to $1,000 annually. Classes may be working on with the Alabama Grocers your family! taken through seminars, workshops, Board of Trustees. As part of our Annual Convention, we community colleges, accredited colleges will again hold our Silent Auction. The and universities, or online programs. We The AGA Convention is well under way Alabama Grocers Education Foundation hope to mail new posters out to members and I cannot stress enough how important Board of Trustees have been coming up later this year. it is for you to get involved in this event. It is the only event that retailers, wholesalers with some amazing ideas for 2019 but we We are definitely staying busy at the and manufacturers from all over the state need your help to make them successful. Association and hope you will find time to come together to network, share ideas, If you have items that can help with this join us in Sandestin! learn about new and upcoming products event, please contact Jessica Brown at the Best Regards, "We are definitely staying busy at the Association." AL A BA M A GRO CER | 9
United - Johnson Brothers of Alabama Proudly Supporting The Alabama Grocers Association For Over 15 Years SERVING ALL 67 COUNTIES
GOVERNMENT RELATIONS Legislature Returns After Passing Gasoline Tax PAT R I C K M C W H O R T ER LEGIS LAT IV E R EPR E S E N TAT IV E T HE MCWHOR T E R GR OUP expanding Alabama’s award winning pre-K The Legislature returned on march 19 to resume the program, an increase for higher education, regular session after completing Governor Ivey's increased funding for Corrections, Law Enforcement and Mental Health. House special session, passing the gasoline tax. Ways & Means-General Fund Committee Chair Steve Clouse expects to bring his The two houses met three legislative days Alabama Citizens Action Project (the old budget before the committee soon after they to try to make up some of the time lost Temperance League) on Wednesday, April return next week, with few changes. between the special session and this week’s 3rd, by the House Economic Development The Senate Finance & Tax-Education Fund Spring Break (March 25-29). Members & Tourism Committee. Chaired by Rep. Committee members have some heartburn returned to Montgomery on April 2 to begin Becky Nordgren of Gadsden, Rep. Ron over the Governor’s plan to take about the fifth legislative day. Session must be Johnson of Sylacauga is Vice Chair, and $35 million from the Education budget to completed by June 17. other members are: Rep. Berry Forte of cover the Children’s Health Insurance Plan Eufaula, Rep. Chip Brown of Mobile, Rep. Rep. Reed Ingram of Montgomery County (CHIP). Corey Harbison of Cullman, Rep. Yolanda introduced HB 186, and Sen. Tom Whatley CHIP has been funded in the past from the Hollis of Birmingham, Rep. Gil Isbell of of Lee County (SB 96) on behalf of the General Fund, but the Governor pledged Gadsden, Rep. Neil Rafferty of Birmingham, Alabama Grocers Association. These bills to end past practices of taking money from Rep. Ginny Shaver of Leesburn, Rep. Andy propose to remove the requirement in state the road fund to cover expenses in the Whitt of Harvest, Rep. Richie Whorton law that cities and counties spend money General Fund. Her Finance Director said of Scottsboro, and Rep. Randy Wood of advertising local legislation to allow them they believe that healthy kids make better Anniston. to implement the sale of alcoholic beverages learners, so they want Education to cover seven days a week. As is required by the state’s constitution, those costs. Governor Ivey presented her proposed This issue has become critically important Sen. Jim McClendon of Springville also budgets for the coming fiscal year. The recently with the recognition of competitive introduced a constitutional amendment (SB economy has been good to both budgets, pressures being applied to many AGA 130) to allow voters to decide whether to and the General Fund has been further members who are located in cities that for have a state lottery. Pressure has increased bolstered by a portion of the tax generated one reason or another cannot compete since Mississippi has moved toward a from online sales. with nearby cities who are allowed to sell lottery, meaning that all surrounding states all week. HB 186 is scheduled for a public The budgets include pay raises of 2% will have one soon. hearing, called by Rev. Joe Godfrey of the for state workers and 4% for teachers, But McClendon’s SB 116, which would “AGA endorsed and strongly supported require the money be split between the Education and General Fund budgets if Governor ivey in last year's election. ” passed, has some controversy surrounding Continued on page 12 ▶ AL A BA M A GRO CER | 11
GOVERNMENT RELATIONS Continued from page 11 ▶ it. Our primary concern for Grocers is that year. Some have suggested legalizing sports license. Now, the effort is being made to we receive a proper commission for selling betting as a way to pay for the state’s cost. impose $2.5 million in new fees (taxes!) on the lottery tickets. HB 41 by Rep. Shane Stringer of Mobile retailers Conversations are continuing between would impose a new set of restrictions on As always, please don’t hesitate to call Pat leadership and Democrats over the the use of alternative nicotine products and McWhorter, Legislative Consultant at possibility of expanding Medicaid. the retailers who sell them. But our biggest 334.221.0220 if you have questions. Concerns are still high over how to pay for concern in this bill is that it would take the the matching dollars needed. Alabama is license fee for selling tobacco products from one of 14 states not to expand Medicaid $0 to $300 per year. since the Affordable Care Act passed When the license was created, AGA federally. worked closely with state officials who were It would add some 340,000 more concerned about the potential loss of federal Alabamians to the Medicaid roles, and cost funds if inspectors did not have a complete the state approximately $168 million next list of retailers selling tobacco. It was agreed that no fee would be charged for this new POTENTIAL YOSEMITE MOS SADAMS.COM/RETAIL NATIONAL PARK , CA RISES IN 6:50 AM PST THE WEST Here, the sun rises on endless opportunities. Our professionals are committed to helping you grow your business and protect your prosperity with industry-tailored tax, assurance, consulting, and wealth management services. Discover how Moss Adams is helping grocery chains thrive. RISE WITH THE WEST. Assurance, tax, and consulting offered through Moss Adams LLP. Investment advisory services offered through Moss Adams Wealth Advisors LLC. Investment banking offered through Moss Adams Capital LLC. 12 | AL AB AM A G R OC E R
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AGA NEWS The A l ab ama Gro cers Ass o ci at ion w ishes to re cog nize its Di amond and Four St ar Sp ons ors for t heir generous supp or t of t he AGA Annu a l C onvent ion. Diamond Sponsors Four Star Sponsors 14 | AL AB AM A G R OC E R
www.alabamagrocers.org for more information Sandestin Golf & Beach Resort July 29 - 31, 2019
AGA NEWS 2 019 B U Y A L A BA M A 'S BES T C AMPAIGN The Alabama Grocers Association, the The Buy Alabama’s Best Campaign Alabama Department of Agriculture formed in 2006 when four Alabama and Industries and the Alabama Food companies, the Alabama Grocers Manufacturers and Producers Association Association and the Alabama Department held a media briefing for the Buy of Agriculture and Industries saw a need Alabama’s Best campaign on March 13. to identify products that were made in The media briefing was held on the Alabama. Today Buy Alabama’s Best Alabama State Capitol Lawn. Speakers has grown to over 50 companies that included Governor Kay Ivey, Agriculture are either headquartered, produce, Commissioner Rick Pate and AGA manufacture or make their products in President Ellie Taylor. our state. Alabama food manufacturers not only Gover nor Ka y Ivey w ith P hilli p Davi s o f sell products in Alabama and employ A a nd R Super ma rkets. Alabamians, but also purchase vast local grocery store, they need to look amounts of raw farm products to make for the Buy Alabama’s Best logo under goods, paper, boxes and packaging. products to ensure they are buying Alabama food product sales have a $2 the best products made right here in billion impact on Alabama’s economy, Alabama. A portion of the proceeds of tax base and along with the food service the sales of these products will benefit industries, employ one out of every four Children’s of Alabama. To date, the Alabamians. campaign’s efforts have raised over three Retailers throughout Alabama will be quarters of a million dollars. supporting this campaign in their stores The food retail industry in Alabama with Alabama product displays, ads, provides over 70,000 jobs with over $2.2 signage, special promotions and will sell billion in annual wages paid. Grocers pay Children’s of Alabama icons to support over $1.2 billion in state taxes and have our fight to find a cure for pediatric a total economic impact on the state’s G o v. I ve y a d d re s s e s a t t e n d e e s. cancer. When consumers shop in their economy of over $12 billion dollars. T he s am p lin g lin e . 16 | AL AB AM A G R OC E R
AGA NEWS Ellie Taylor, President, Alabama Grocers Association. “Purchasing Alabama-made products supports both our local economy and Children’s of Alabama.” “Children’s of Alabama is thankful for the community partners and the difference made through the Buy Alabama’s Best Campaign,” said Emily Hornak, Community Development and Cause Marketing manager at Children’s Haro l d G a r re t t , G a t e w a y F ood s an d Emily of Alabama. “By supporting the local Hor nak o f C h i l d re n ' s o f A lab ama. economy and purchasing products made Ellie Ta ylor, P resident AGA; Lt . Go ver no r W ill Ainsw orth; a nd P a trick M cW ho r t er, The Also featured at the event is the in our state, Alabamians can feel good McWhorter Group. Wright2U Freshmobile delivery van about supporting both local businesses Birmingham’s historic Southside with owned by Jimmy Wright, Wright’s and helping families with children facing additional specialty services provided at Market of Opelika. Jimmy Wright cancer.” Children’s South, Children’s on 3rd and was awarded a $60,000 grant from the Since 1911, Children’s of Alabama has in Huntsville and Montgomery. Primary Alabama Department of Economic and provided specialized medical care for care is provided at more than a dozen Community Affairs through Healthy ill and injured children. Ranked among medical offices in communities across Food Financing. Over 1.8 million the best pediatric medical centers in the central Alabama. Children’s of Alabama Alabamians, including over half a million nation by US News & World Report, is the only medical center in Alabama children live in underserved areas in our Children’s provided care for youngsters dedicated solely to the care and treatment state. Grocers are working to be a part from every county in Alabama, 42 other of children. It is a private, not-for-profit of the solution to this problem with ideas states and 10 foreign countries last medical center that serves as the primary “outside the box” to find solutions to year, representing more than 653,000 site of the University of Alabama at bring fresh, healthy perishable food to all outpatient visits and nearly 14,000 Birmingham (UAB) pediatric medicine, citizens of Alabama in both urban and inpatient admissions. With more than 2 surgery, psychiatry, research and rural areas. million square feet, it is the third largest residency programs. More information is pediatric medical facility in the U.S. available at www.childrensal.org. “We hope that people will look for the Buy Alabama’s Best logo when they are Children’s offers inpatient and outpatient shopping at their local grocery store,” said services across its Russell Campus on Jimmy Wright of Wrights Ma rket show ing Gover nor Ka y Ivey and E l l i e G o v. I ve y s a m p lin g s o m e J oh n s F amou s S law Dre ssin g . Ta ylor, P resident of AGA the Wrights Mobile Ma rket. AL A BA M A GRO CER | 17
AGA NEWS 2 019 B U Y A L A BA M A 'S BES T C AMPAIGN LUN C H E ON Rick P a te, Commissioner, AL Dept. Of AG ; E l l i e Tayl o r, P resident, AGA; Kris Jonczyk, P ublix Super Mar ket s , I nc. B o b Tay lo r, R e d D ia m o n d ; Don Wh ite , U tz GF ; S te v e O we ns, Zeigler; P hillip D avi s , A R ; D a n i e l Mo n t gome ry, Z e ilg e r; F ran k D' A mic o, III; Johnny Collins, D eans . Harold Ga rrett, Ga tew a y Foods; Jim Wa rd, Terry Troup, P WADC; Ca rolyn Smi t h, R ed U tz Gold en Fla ke. Dia mond; Ben Ra y, Millie Ra ys . D r. Fred e r i c k G o l d m a n , Ch ild re n ' s of A l abama . Disp lay Contest W inner. Don White, Utz Golde n Fl ake; Andy V irciglio, P iggly W iggl y o f Jeff er s o n County. Jay M i t c h e ll, Mit c h e l l Groc e ry ; J e ssic a B rown , A GA ; J immy Wright, Wr i ght s M a r k e t ; E llie Ta y lor, A GA ; Wad e Pay n e , F ood Giant. Check P resenta tion. 18 | AL AB AM A G R OC E R
AGA NEWS WI C PA R T ICIPA N T S I SSUED F I RS T E WIC C AR DS State Health Officer Dr. Scott Harris in food instruments at WIC-authorized planning and implementation of eWIC announced the beginning of Alabama’s stores statewide. in our state. For retailers and WIC eWIC pilot project which will be launched participants, eWIC will be a tremendous Alabama WIC Program Director in two phases starting today. Participants improvement to the overall shopping Amanda Martin said, “I want to thank in the Alabama WIC Program in Autauga, experience with smoother transactions all of the program Elmore and Montgomery counties at the register, staff that have been are being issued the state’s first eWIC streamlining of involved with eWIC electronic benefit transfer cards. processing, and implementation WIC is the Special Supplemental Nutrition and our clinic staff reduced checkout Program for Women, Infants and who see participants times. Our retailers Children funded by the U.S. Department daily to provide WIC are excited to move of Agriculture, Food and Nutrition services. We have forward with eWIC Services. The mission of the WIC Program been working towards as we continue to is to improve the health and nutritional this milestone since offer quality customer status of women, infants and children 2009 and are extremely happy to begin service to all Alabama consumers.” during critical times of growth and this pilot.” The second phase of the eWIC rollout will development. begin April 1, and includes the remainder Recognizing the value of eWIC, the Through this new system, benefits for federal Healthy, Hunger-Free Kids Act of the counties in the East Central and WIC-approved foods are automatically of 2010 mandates that each state WIC the Northeastern districts of the Alabama entered onto a card that is similar to a agency implement an electronic benefit Department of Public Health. These are debit card. This card replaces the current transfer system throughout the state by Blount, Bullock, Calhoun, Chambers, paper-based food instruments and cash- Oct. 1, 2020. Cherokee, Clay, Cleburne, DeKalb, value vouchers which are redeemed at Etowah, Lee, Lowndes, Macon, Randolph, Stacey Neumann, WIC Vendor Russell, St. Clair, Shelby, Talladega and WIC-authorized stores statewide. Each Management director and eWIC project Tallapoosa counties. The pilot area has manager, said, “We are very excited to 36,000 participants, 27 clinics and 192 begin our eWIC pilot. Vendor enablement authorized WIC vendors. is a key piece to implementing eWIC. I want to thank all our authorized WIC After the pilot, implementation in other vendors for their hard work in preparing districts is scheduled as follows: for eWIC implementation.” • June: Northern District (approximately EWIC will bring many benefits to WIC 24,961 participants, 15 clinics, 143 WIC participants and authorized WIC vendors. vendors) These benefits include: • July: West Central and Jefferson St acey N e u m a n n a n d Aman d a M artin A l abama W I C D e p a r t m e nt; Ellie Tay lor, A GA ; • Less stigma for the WIC participants Districts (approximately 24,967 and D r. S c o t t H a r r i s S t a t e He alth O ffic e r participants, 20 clinics, 130 WIC vendors) • Smoother transaction at the register month more than 120,000 Alabama • August: Southeastern, Mobile and participants at nutritional risk receive • Reduced time “in lane” Southwestern Districts (approximately WIC benefits through all county health • Automatic electronic payments to vendors 34,292 participants, 35 clinics, 174 WIC departments and with two private local vendors) Ellie Taylor, Alabama Grocers Association agencies. There are currently 638 WIC- president, said, “AGA was proud to Contact your county health department authorized stores in the state. In 2018, partner with the Alabama Department for more information or visit participants redeemed almost $97 million of Public Health, WIC Division, on the alabamapublichealth.gov/WIC. AL A BA M A GRO CER | 19
INSIDE THE BELTWAY Now Is the Time to Become a G r o c e ry I n d u s t ry A d v o c at e J EN N I F ER H ATC H ER S E N IOR V ICE PR E S IDE N T, GOVERNMENT AN D PUBLIC AFFAIR S FOOD MARKETING INSTITUTE you would like to be a resource to them as With the Democrats in control of the House of they consider some of the complex issues Representatives, your involvement is needed presented to Congress. more than ever. Our first request of you is to ask you to commit to being a grocery industry advocate. They’re off! The 116th Congress has committee chairs and determining ratios of For now, you can sign up on our new officially started, although not exactly on Democrats and Republicans on committees advocacy platform located at fmi.org. Once a high note given the tremendous impasse that will determine committee assignments we have your contact information, we will bringing the longest government shutdown for the newly elected Members as well as then send you a message any time there are in history. some of the returning members. critical issues before Congress where we Republicans now control the U.S. Senate by a In at least one case the new agenda would like you to consider weighing in. It 53-47 margin (two Independents caucus with resulted in a new name to the committee – is easy, completely customizable if you like, the Democrats). Republican-led committees, Education and Labor instead of Education and can be accomplished from your phone Republican leadership, and Republican and the Workforce. With 59 new Democrat in less than one minute. You can send an Committee Chairman remain committed in members and 29 new Republican members – email, tweet or make a phone call to your 2019 to continue reshaping the judiciary by many holding elective office for the first congressional office. confirming new judges in vacancies across time, our most important job is to educate Once you sign up to be a grocery advocate, the country. them on our industry and the essential daily keep your eyes peeled for our first message, interactions your businesses have with the Additionally, the Senate will consider which will be for you to invite your Member federal government in order to protect your nominees for a number of vacant positions of Congress to your store or business to customers and associates and preserve your at the Cabinet and Subcabinet levels see what your team does every day to business as a critical contributor to the tax at agencies throughout the Trump serve customers. base of your local communities. Administration. There are nine new U.S. As you know, governing is by no way limited Senators, busy learning the ropes and getting We expect oversight of the Trump to Washington, D.C. and federal issues. FMI their committee assignments, and already Administration, labor issues, the “green has just completed our 2019 State Legislative three veteran Senators – Senators Grassley agenda,” repeal of the tax cut, infrastructure, Outlook with an overview of issues that are (R-IA), Alexander (R-TN) and Roberts and health care to be high on the priority likely to be considered in state legislatures (R-KS) who have announced their list of the new Democrat leadership. and local municipalities across the country. ■ retirements in 2020. FMI has been on Capitol Hill meeting The new U.S. House of Representatives led with each of the newly-elected Members’ by Speaker Nancy Pelosi has an entirely offices – with the goal of explaining more different focus. The new Democrat majority about our industry, how we interact with is busy appointing new government agencies, and how we and 20 | AL AB AM A G R OC E R
WASHINGTON REPORT F i v e T r e n d s t o Wat c h i n 2 0 1 9 PET ER L A R K I N PR E S IDE N T AN D CEO N AT ION AL GR OCER S AS S OCIATIO N Some key industry and consumer trends from 2018 Wellness Soars Health is a more significant topic with will take on even greater importance in 2019. consumers. Everyone is becoming more aware as health costs soar. Retailers need As 2019 begins to unfold, independent Transparency Progresses to have the right products for customers, retailers are in a good position to get ahead The need for transparency is not a but just as important is the ability to of the key industry and consumers trends temporary development. It’s a long-term provide guidance. that will impact the entire grocery industry. trend. Consumers are demanding more They need to be aware of these developments information. Embracing transparency will This is needed in areas of the store that and the high stakes involved. be essential for retailers to maintain and include packaged foods, the perimeter, and grow trust. the pharmacy. Independents, known for their Here are five trends that should be on the differentiated service, have what it takes to radar of independent grocers this year: Shoppers are interested not only in learning offer products and guidance that differentiate more about product ingredients but also in from competitors. Gen Z Comes of Age attributes such as sourcing. Independents This generation, often defined as consumers are already among the most trusted retailers, Consolidation Advances born between the mid-1990s and 2012, is still so transparency is a good way to further As mergers continue, the consolidation up for grabs. While they mirror millennial grow that bond with shoppers. of large retailers can lead to dilution of the behaviors in some ways, this group also unique aspects that defined their successes has its own unique identity. Independents E-Commerce Evolves in the first place. That underscores the will need to understand what it takes to E-commerce is often viewed as a threat importance of independents as the retailers connect with these younger consumers, to traditional retailers, but it’s also an that maintain high standards and unique including with enhanced variety and digital opportunity. Independents are beginning to local approaches. Customers seeking experiences. make progress with a range of e-commerce local offerings are likely to look to For example, Gen Zers are more comfortable models, and they need to understand that independents more. receiving advertisements through social success with customers lies in employing a balanced approach to in-store and online The five trends outlined here should be on media based on their activity and interests. strategies. Independents don’t need to the radar of independents. They will need This provides retailers with an opportunity make the largest e-commerce investments to determine the best investments to make to expand digital advertising that can be in the industry. in the coming years, which isn't easy in an specially targeted to increase sales. Retailers industry heading in so many new directions. that gain the trust and loyalty of these However, they do need to determine shoppers will be in a stronger position for which strategies will be most important for These are difficult decisions, but many years to come. customer convenience. For example, fresh independents are up to the task. They can is where independents can differentiate position themselves as the retail segment themselves in a crowded e-commerce field that understands shopper needs and is by excelling in the category. willing to prove it. ■ AL A BA M A GRO CER | 21
VIEWPOINT Bread & Metaphors K EV I N CO U PE FOUN DE R , MOR N IN GN E WS BEAT.CO M At this year’s Consumer Electronics Show, I found communications and media technology, while another one might work with Google, the best innovations are the ones that marry and another with Amazon. technology to basic human needs and reflect the I understand why these alliances are created – it’s all about the money. retailer’s ability to walk in the shopper’s shoes. I’m sure car companies get a nice check from technology companies to have their In the end, despite all the focus on high tech, I’ve been to the show, and I found it to be systems installed because that then brings the most talked-about piece of technology every bit as overwhelming as I expected it to the driver into that company’s ecosystem. at the recent Consumer Electronics Show be – and talking to event veterans, it seemed (CES) in Las Vegas was a bread maker. And clear to me that this was a transitional I’m not sure this is a very consumer-centric one of the core retailing lessons for me came year for CES. There wasn’t a blockbuster way for car companies to think about in the form of a metaphor. announcement of some new technology or these things, though. If I’m in the Amazon killer app that looks destined to change all ecosystem, and I want to buy a Ford, Sure, there was plenty of VR. And AI. of our lives. which seems to be firmly implanted in the And 5G. And self-care-oriented products, Apple ecosystem, I may decide to look for including one massager, the Osé, that In fact, this seems to be a transitional time another car brand so I don’t have to change used microrobotics so impressively that for technology in general, with even Apple technology ecosystems. I might not, if the it got an innovation award from CES. It struggling a bit to find its footing in the importance of the car brand outweighs the then was stripped of its award when it was marketplace at a time when there appears brand of the technology. But I might. determined that the item was less about self- to be no next big thing to unveil. care and more about being an instrument My point here is this: Wouldn’t these (One caveat. There always is a next big of self-pleasure, though that strikes me as a automobile companies be more driver- thing, and it often comes along and smacks distinction without a difference, or maybe a friendly if they actually took an à la carte us upside the head when we least expect it, difference without a distinction. approach to this kind of technology, from a source that we didn’t see coming. allowing me as the customer to choose what There also was a considerable number of It just didn’t happen at CES.) I want? Or, to put it another way, wouldn’t voice-activated gizmos. And even a 96-inch To me, a central lesson of CES for retailers they be better off if they put themselves in 8K television that was amazing…though came in the form of what ends up being a the shoes of the customer? in addition to being wildly expensive, one metaphor – the technology decisions being has to remember that it is likely to be years To me, those are the shoes in which retailers made by car companies. before 8K content is available, so owning have to walk these days if they are going to one would be like having an Aston Martin Walk around CES (and I suppose any car be successful.Let’s take a more supermarket- DB5 sitting in your driveway and absolutely show) and one of the things you see is centric example – click-and-collect systems, no access to fuel. companies choosing technology lanes. also known as BOPIS (buy online, pickup This automobile company decides in-store). In wandering CES – this was the first time to work with Apple in terms of installing 22 | AL AB AM A G R OC E R
Research from WD Partners shows can’t help but make you hungry. have them, and offer solutions that improve that among customers who want to do Hunger is a powerful tool if you are in our lives. e-commerce, BOPIS is the number one the food business. So how come many Sure, tech for tech’s sake can be cool, fun requested item, far beyond delivery; BOPIS supermarkets have all the aroma appeal and even, given a little time, critical to how actually tends to create larger basket sizes of a CVS? The BreadBot, by tapping into we live. But tech that touches the heart, soul for the retailer; and, BOPIS tends to get something visceral, represents the marriage and stomach, in addition to the mind, is the profitable faster than delivery. of technology to the satisfaction of a basic real secret sauce for a retailer’s success. ■ And yet, many retailers don’t offer it, human desire. many of those that do don’t do it well, That’s what the best technology innovations and many retailers are building stores do – address essential human needs and without creating the basic infrastructure desires, sometimes even before we know we for providing click-and-collect in the future (much less delivery). In essence, they are THE opening new stores that in some ways already are obsolete. Why? I believe there is a certain amount of denial of future inevitabilities here, plus WORLD’S MOST an unwillingness or inability to think like the customer. This even extends to the pickup bays created by companies that are doing BOPIS – most REFRESHING BEER retailers may have two, three or four slots. ™ But what happens if you’re the fourth customer to pull up, and the three slots are filled? The entire premise behind a click- and-collect offering falls apart, and you’ve alienated the shopper. The technology exists to turn an entire parking lot into a pickup bay, not to mention track customers’ movements so that you know exactly when their car enters your property. But at this point, there aren’t a lot of retailers making these kinds of investments, even though I think that any reasonable reading of the retail tea leaves suggests this is where the world is going and what customers will demand. Alienate or disenfranchise these customers, and they may go elsewhere…like to Amazon, which will be happy to deliver stuff right to their houses or offices. Finally, about the bread maker…I wasn’t being hyperbolic when I referred to it being perhaps the most talked-about technology at CES. The BreadBot, as it has been dubbed by its creator, the Wilkinson Baking Company, is a fresh bread vending machine. Half of it bakes fresh bread, and the other half sells it by the loaf…and the whole thing creates not just theater, but also some CELEBRATE RESPONSIBLY® © 2018 COORS BREWING CO., GOLDEN, CO • BEER powerful aromas that, when you smell them, AL A BA M A GRO CER | 23
! OUTSIDE THE BOX N EW RETAIL PERS PECTIV ES Man Up Euromonitor reports that global sales of men’s grooming products reached $50 billion in 2017 and is on track to grow 16 percent by 2020. American men already use four grooming products per day and spend 48 minutes daily on grooming including washing, conditioning and styling their hair. iStock FUTURE FOOD If you haven’t heard of Wageningen University in The Netherlands you might want to look up the institution at the center of an agri-revolution. In a corner of Northern Europe nicknamed “Food Valley” the university is focusing on food technology including altering the color of lights at indoor grow rooms to increase yield, vitamin content, smell and taste. Turn on the red light and you get more efficient growth. The blue light gets you shorter plants with higher iStock levels of antioxidants. Dollars SHOCKING RESULTS in Singles The popularity of electric vehicles is up so much Chinese data services that Tesco and Volkswagen are teaming up to firm Synfun reports build the largest charging network in the U.S. that the annual Singles Day sales The firms are planning to launch 2,400 generated about $45 billion, two- additional charging stations at 600 Tesco thirds of which was accounted stores over the next three years. And for by Alibaba, China’s leading the service will be free to consumers e-commerce company. using a regular charger. iStock 24 | AL AB AM A G R OC E R
Kid S RISE of the tuff Kudo s MACHINES? Business conversations seem to be centered around artificial intelligence. But it’s not about putting robots in stores. Non-tech companies are starting to see AI opportunities for achieving business goals and improving P&Ls by using it to redesign their organizations, cut costs, analyze geographic expansion and becoming part of the business strategy. iStock iStock If you want to appeal to parents, take care of the kids. This was the thinking behind a line of clothing for children Professional Ethics with disabilities introduced by Marks & Spencer. The “Adapted for Easy Dressing” In a 2018 survey of ethical and line is available for kids up to age 16 and honesty standards, the Gallup features innovations such as easy-dressing Organization found that the top products with as few seams as possible, three slots belonged to those in the snaps instead of buttons and zippers, and medical profession. Nurses took the Velcro fasteners which makes it easier number one slot, followed by doctors. for kids in wheelchairs. The entire line But only one percentage point behind is modeled after the company’s regular iStock doctors were pharmacists. clothing line so disabilities aren’t defined by the clothing. Ultimate Experience North of the Border Not that there aren’t challenges, but the place to be in the retail world is Toronto. Hi- rise, multi-family building construction is at an all-time high and there are reportedly iStock 91 cranes on this Canadian skyline. Toronto has become the fastest growing Everyone talks about customer experience. But John Lewis & Partners department stores city in the U.S. and Canada, according to in the United Kingdom want to provide the ultimate in personalization. Private shopping Cushman & Wakefield. Taxes and wages will enable customers to book an entire department for after-hours shopping with access to are a bit higher than the U.S. which hasn’t expert advisors. Customers can also book the store for an evening’s shopping party if you seemed to stop Nordstrom’s, a recent entry can get your friends and family to spend a minimum of $12,800. from making a killing. AL A BA M A GRO CER | 25
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GAZING AROUND GROCERY: INMAR INSIGHTS INTO 2019 By Craig Rosenblum, Regional Vice President Enterprise Retail, Inmar With the holidays in the rear-view, it’s time to pause and take a quick look ahead at what promises to be a very “interesting” 2019 for trading partners in the grocery space. And, from my perspective, much of what will make this year interesting will be the increased deployment of automation. As grocery retail continues to operate on razor-thin Only time will provide the answers but 2019 will see margins (while the cost of servicing shoppers grows) a growing number of retailers using automation to it is imperative that retailers maximize efficiency all try to improve operations and more quickly activate along the value chain from inventory optimization shoppers. There will be more cashless and/or self- through closing the last mile and automation looks to checkouts, more geofencing, more delivery drones and be the answer. But, for all the promise of efficiency and autonomous vehicles, more virtual reality and even the potential to drive shopper satisfaction and loyalty, more robots. But will all this automation automate the use of automation poses some daunting questions. success? We’ll have to see. Will today’s consumers greet this technology with In the meantime, to get a broader sense of how the delight and what aspects of this “new retail” will require industry will engage, activate and retain shoppers this a longer period of adjustment for shoppers? How far year, I asked several of my colleagues at Inmar for their will customers and shoppers be willing to go insights into what will be influencing and shaping the in providing personal information so automated grocery marketplace. Here’s what they had to say… technology can work its magic toward delivering the ultimate shopping experience? Continued on page 28 ▶ CAL AL AI FO BA RNIA M A GRO GROCER CER| | 27
◀ Continued from page 27 But even before shoppers reach the store they’re going to be reaching “Personalized, experiential retail will out to retailers online for help with personalized meal planning and proliferate -- from web pages to food prep food product options that not only support their wellness goals but to pricing.” also are tied to their individual health states. Jon Hauptman, Sr. Director, Analytics Solutions; Diana Medina, To meet this need, retailers will lead with curated content (recipes, Director, e-Commerce Solutions; and Tom Martin, Associate storytelling, promoted products, etc.) intended to inspire and activate Director, Digital Solutions shoppers at every meal occasion with the information tailored to the specific needs of the shopper including budget, number of guests, Retailers and brands have already demonstrated a willingness to health considerations, etc. participate in personalized communication with shoppers but this form of engagement is going to move from occasional to obligatory Creating that kind of uber-specific, loyalty-building connection is in 2019. going to require that retailers accelerate investment in the tools and technologies already available for better engaging shoppers while, at We’ll see marketers, especially those on the retailer side, commit to the same time, pursuing cross-industry collaboration with healthcare establishing one-to-one communication with shoppers and they’ll systems and insurers to better enable shoppers in their quest for do it through personalized web pages and personalized mobile app better health. screens that employ individualized screen layout and content, curated assortment bundles, etc. Smart retailers will use more real-time communication with shoppers around their online orders – and focus their efforts on optimizing the online shopping experience and delivering superior quality of service as key differentiators in an already crowded space. However, the most striking, and potentially most impactful employment, of personalization may well be personalized pricing. With the technology now available and the concept proven, expect to see retailers more actively engage in store-level personalized pricing and promotion – maintaining their strongest long-term base prices while providing shorter-term promotional pricing to select households on those items most important to them regardless of department, category or brand. “Supply chain will go ‘super strategic’ as efforts around e-commerce focus on functionality and profitability.” Paul Weitzel, Vice President, Analytics Solutions iStock E-commerce will continue to be the leading growth channel for food And these personalized “conversations” will, more and more, take and beverage sales in 2019 and this growth will be fueled, in large place around meals and food preparation as the goal for retailers will part, by the increasing number of brick & click locations that will shift from growing share of wallet to growing share of stomach. come into operation during the year. They’ll pursue this goal in-store by dedicating more space to As this expansion accelerates, trading partners and service providers grocerants, breweries, wine bars, food stations, coffee bars, etc. will be increasingly focused around delivering the best total landed Retailers will also take additional steps to make it easier and cost to customers and consumers and begin to seriously tackle more attractive for shoppers to pre-order prepared foods for operational requirements for making e-commerce sustainable and same-trip pickup. profitable over the long term. With shoppers’ heightened focus on healthier eating, additional Therefore, expect to see more unique arrangements between trading “better for you” center store options will not suffice; retailers won’t partners with independent fulfillment platforms fulfilling online be able to rely on new product lines from manufacturers to attract orders directly inside the manufacturer’s mixing centers – lessening and retain these increasingly discriminating shoppers. distribution and handling and keeping costs down for online Expanded, and more nutritious, deli, prepared, pre-packaged and shoppers. Concurrently, there will be greater use of smaller depots locally sourced perimeter options will be retailer “must haves” in closer to delivery points to make home deliveries less costly, more 2019, with prominent labeling and signage that leave no doubt among operators leveraging automation to make the pick-and-pack shoppers as to the quality – and origin – of what’s being offered. 28 | AL AB AM A G R OC E R
process more efficient, and center store shrinking as brick and The bottom line will be that retailers, working to build long-term mortar locations make room for high-volume backroom picking shopper loyalty, will take on greater (if not full) responsibility for and packing. store brands. This new “ownership” means that new skills, such as Blockchain automation will make its way into integrated supply consumer and shopper research, must be acquired. At the same chains so that food transparency and traceability will be seamless time, leveraging the opportunity presented by innovative private and readily available to trading partners and, ultimately, consumers. label offerings will require that retailers and store brand suppliers This push will continue to come from leading U.S. retailers and their collaborate around product conceptualization and development, global trading partners who are increasingly requiring upgraded not just create and respond to bid specs. sourcing information and better food safety solutions. Applied As online offerings will come to include more produce, additional correctly, blockchain should also reduce redundancies inherent innovative private label products and broader CPG assortment, those across trading partner systems and operations. retailer locations still standing after further consolidation will serve This year’s omnichannel expansion will also include more and more as hyper-marts crossed with mini distribution centers. CPG manufacturers testing their own direct-to-consumer programs. Predictive analytics will guide the supply chain logistics necessary to There will be widespread interest and no shortage of experiments, but make this increased personalized assortment, speed and convenience it will be those CPGs that produce small cube, high-value products economically viable. Larger retailers that have stuck to analytics that will be better positioned to effectively leverage the opportunity hiring initiatives since the early 2000s and converted lower foot- and make it pay off. traffic volume establishments into pseudo-DCs will fair best. Traditional grocers will likely expand same-day delivery efforts– paralleling the rise in consumer comfort with online grocery “Private label will pivot toward innovation shopping. And it will be predictive analytics that will inform while analysts will drive a superior customer spend and make this new level of CX achievable and profitable. experience.” Jim Hertel, Sr. VP of Retail Promotion Network and Irv Turner, Vice President, Analytics Operations Analytics is transforming grocery the way it has transformed several industries – from finance to pharmaceuticals. That transformation is not going to slow in 2019 as the key grocery retail players will continue growing their analytics stables to drive a new level of Customer Experience (CX). They will be investing heavily in hiring analysts and data scientists to increase customer convenience while using predictive analytics to grow razor-thin margins. Even now, predictive analytics is at the core of hyper-localized shelf assortment, shopper segmentation aligned with product affinity, personalized discounts by CPG-brand price-sensitivity and forecasted iStock out-of-stocks by hour of day. Going forward, predictive analytics – in combination with highly customized data storage vectors populated from retailer data lakes – will significantly increase personalization A year of accelerating change… and CX to the point where out-of-stock forecasting will focus on the From increased automation to greater shopper autonomy, 2019 will household refrigerator rather than the supermarket shelf. see accelerating change across virtually every facet of the grocery Highlighting this enhanced assortment will be the addition of new industry. Continuously shifting shopper behaviors – further impacted private label offerings that do more than simply mimic national by looming economic uncertainty – will drive retailers and brands brands. This break with retailers’ long-standing practice of growing to work harder than ever to innovate their operations in order to new sales by relying on replicating new products from national brand anticipate and effectively address diverse marketplace demands. manufacturers is showing stress as cost and margin pressures increase And while there is no single strategy that will guarantee successful, for CPGs. Therefore, retailers are going to have to step up. And they if not superior, shopper activation, those trading partners that will as the promised benefits are significant. make full use of available data and conscientiously apply advanced Store brands that deliver on quality, in addition to value, have high analytics to inform their shopper engagement will be those that retain appeal among younger shoppers and represent a unique opportunity their competitiveness and protect their profitability in the (very to attract cost-conscious Millennials who want an “experience” even interesting) year ahead. ■ as they seek to save. Besides adding margin, private label can drive store choice and shopper loyalty based on exclusive availability. AL A BA M A GRO CER | 29
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