alabama grocer issue 1, 2016
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ALABAMA GROCERS ASSOCIATION 2016, ISSUE 1
For the latest industry news visit www.alabamagrocers.com
INAUGURALSPEC IAL
I S S U E
Shopping For MERGERS AND ACQUISITIONS
ALABAMA GROCERS ASSOCIATION 2016, ISSUE 1
IN THIS ISSUE
Greer’s Markets Turns 100
Saving The Planet…Quietly
Exploring Tomorrow Today
For the latest industry news visit alabamagrocers.org
A L A B A M A
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FEATURESLegislative Session Ends With a Bang, WhimperThe 2016 legislative session ended with both a bang and a whimper. One needed a program to know which group was filibustering and delaying action at any given time.
Greer’s Markets Turns 100 In 1916, Autry Greer founded what is now a fifth generation supermarket chain operating 34 stores throughout Alabama, Mississippi and Florida. Learn more about Autry’s amazing legacy that is Greer’s Markets.
Mergers and Acquisitions2015 was a record year for all merger and acquisition activity and 2016 might hit the same heady heights. The reasons are simple and not surprising.
Saving the Planet...QuietlyFor years now, there’s been a quiet movement under way on the part of the food industsry to save the planet. And best of all, these sustainability efforts are sustainable.
Exploring Tomorrow TodayA California-based think tank is explroing global economics, generational trends and technological developments to learn more about where and how people willlive, eat and shop in the future.
COLUMNSPresident’s Message Your No. 1 Benefit ................................................5
From The Chair Hot Off The Press! ................................................6
Viewpoint – Kevin Coupe The Shopping Path of Least Resistence .................8
Washington Report Debit Card Swipe Fee Reform A Step in the Right Direction ............................................ 16
DEPARTMENTSGovernment Relations .......................................10
AGA News .........................................................12
15 Minutes With ................................................36
C O N T E N T S | Issue 1
ALABAMA GROCERS ASSOCIATION
President Ellie Smotherman Taylor
Legislative Consultant Pat McWhorter
Membership/Event Coordinator Jessica Brown
Alabama Grocer is the official publication of the Alabama Grocers Association.
Alabama Grocers Association 300 Vestavia Parkway, Ste. 3500 Birmingham, Alabama 35216 Tel: (800) 844-2391 Fax: (205) 823-5146 Website: alabamagrocers.orgFor association members, subscription is included in membership dues.
© 2016 Alabama Grocers Association
Editor Jessica Brown E-mail: [email protected]
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EXECUTIVE COMMITTEE
Chairman of the Board Peter “Greg” Gregerson Gregerson’s Foods
Vice Chairman Frank D’Amico, III BTC Wholesale Distributors
Past Chairman Jack Howell Forster & Howell
Treasurer Darwin Metcalf Western Markets
Secretary Bo Taylor Coca-Cola Bottling Company United, Inc.
Sergeant-at-Arms James Cochran Buffalo Rock Co./Pepsi
DIRECTORS
Mike Fuller Fuller’s Supermarket
R. Kevin Miller Acosta Sales & Marketing
Mac Otts Autry Greer & Sons
James Scott Lighting Specialists
EX-OFFICIO BOARD
MEMBERS
Stan Alexander Associated Grocers of the South
Naseem Ajlouny Buy-Lo Quality Foods
Jeff Brown Country Delite Farms
Jack Carlile SuperValu
Kirk Clark Mitchell Grocery Corporation
Mike Coggins Sherwood Food Distributors
Johnny Collins Barber’s Dairy
Bob Crawford United Johnson Brothers
Mike Danes Associated Wholesale Grocers
Bill Davis A&R Supermarkets
John Fargason Acosta Sales & Marketing
Mark Gallivan Alliance Sales & Marketing
Robert Gamble Bunzl Distribution
Curtis Lyons, Jr. Flowers Baking Company
Mike O’Shell Rouses Enterprises
Eddy Quinley Advantage Solutions
Dana Weldon Dutch Farms
John Wilson Super Foods Supermarkets
David Bullard Piggly Wiggly Alabama Distributing Company
Harold Garrett Gateway Foods
Keith Lusk Golden Flake Snack Foods
Jay Mitchell Mitchell Grocery Corporation
Wade Payne Food Giant
VICE PRESIDENTS
Paul Burnett Byars | Wright
Ronnie Cook Bimbo Bakeries
Chris Crosby Gloden Flake Snack Foods
Danny Dunbar Snyder’s-Lance
Jimmy Freeman Freeman’s Shur Valu
Larry Garrett Vietti/Southgate Foods
Kevin Gillespie Acosta Sales & Marketing
Mike Oakley Alabama Power Company
Steve Mulford Royal Foods
Austin Peake Peake & Associates
Don Richardson Coca-Cola Bottling Company United, Inc.
Brian Smith Community Coffee
BOARD OF TRUSTEES
Chairman Jay Mitchell Mitchell Grocery Corporation
Vice Chairman Tom Keller Associated Grocers of the South
President Ellie Smotherman Taylor Alabama Grocers Association
Secretary/Treasurer Phillip Davis A&R Supermarkets
Alabama Grocers Education Foundation
Alabama Grocers Association
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P R E S I D E N T ’ S M E S S A G E
Your Number One BenefitYour association provides many valuable benefits designed to help your business succeed. But as we learned once again, this time in the City of Birmingham, Advocating on behalf of our industry at both the local and state levels continues to be the No. 1 benefit of AGA membership.
When people ask me the most important
role of the Association, my response is always
our legislative and regulatory efforts. That
was never more true this year in the fight by
the Birmingham City Council to increase the
minimum wage in Birmingham to $10.10 an hour.
Not only did they vote to take out the provision
of increasing the wage by staggered amounts,
$8.65 in July 2016 and $10.10 in July 2017, they
voted in one day to make the pay increase $10.10
and start immediately upon signage and posting
by the mayor.
There was no way our member companies could
change payroll records and employee benefits in
one day’s time. Makes you wonder if those on
the council have ever run a company or signed a
payroll check.
In legislative fights like this one, we often ask
our members to testify before the legislative
committee and I cannot thank those members
enough who are willing do so. It is critically
important as it was in the minimum wage battle
for our legislators to see and understand the
ramifications of what local, state and federal
legislation can do to affect our businesses.
In the end on the fight of minimum wage
(see article), we were able to work with
Representative David Faulkner in the House and
Senator Jabo Waggoner in the Senate, to prevent
local cities from passing not only minimum wage
legislation but also minimum leave and other
employee benefits related to labor.
If you see these two gentlemen or any other
legislators that voted in favor of HB174, please
communicate our thanks on behalf of your
company and our Association. This legislation
would have cost our member companies
countless dollars and made it impossible to
transfer employees from one store to another
outside of the Birmingham area. A full legislative
wrap up is included in this edition of the Alabama
Grocer.
Thank you to those of you who participated
in our grass roots survey. We need to know
what connections you have with local, state
and federal elected officials. As in the case
of Birmingham with minimum wage, these
connections were vitally important and we called
on many of our members to contact the city
council and Mayor Bell with our concerns and
opposition. If you did not participate, we will
be making individuals calls from the Association
office to get this critical information.
If you have not already signed up, please consider
attending the AGA Annual Convention, July 24-
27 at the Marriott’s Grand Hotel in Point Clear,
Alabama.
We have a sold out exhibit hall, fantastic
business session and great networking among
industry leaders. Don’t miss the “Day in the Life
of a Store Manager” Panel or our regulatory
panel discussion on Tuesday. Representatives
will be there from the Alabama Department
of Agriculture, Alabama Department of Public
Health, Alabama WIC and USDA FNS to discuss
the top 5 violations in our stores and how to
prevent them.
They will also be accessible during exhibit hall
time for any individual questions you would like
to ask. We will also have a seminar from the Food
and Safety Inspection Service, U.S. Department of
Agriculture to discuss the new meat grinding and
other meat regulations that just went into effect.
As always, I am privileged to serve as your
President and thank all of you for the important
work you do on behalf of the Association. n
ELL IE SMOTHERMAN TAYLOR
President
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F R O M T H E C H A I RF R O M T H E C H A I R
PETER GREGERSONCGA Chair of the Board,
Gregerson FoodsWelcome to the new “Alabama Grocer”!
As this is our very first edition, it is sure to
become a collectors item! We are sure you will
not only enjoy the publication, but profit from
the information it contains.
Our industry and our society as a whole are
constantly changing. Our Mission as the Alabama
Grocers Association has always been to promote
and support the growth and success of the
food industry in the state of Alabama through
advocacy, education, public relations, and
networking.
With that in mind, I am excited to let you know
that the Association will begin working with
some talented people across the nation to bring
you a bi-monthly digital magazine entitled the
“Alabama Grocer.”
Our first issue will be released in July and we
will celebrate the release at the AGA 2016
Convention. These magazines will be full of
inspiring articles on hot button grocery topics
across the nation. The articles will be both
though provoking and informative. In addition,
there will be featured articles from both the AGA
Chairman and President, as well as any legislative
updates and pertinent information going on
in our own state and within our Association.
We are confident you will be hard pressed to
find a better Grocery related magazine in the
southeast.
You will find this magazine to be a valuable
asset to you both personally and professionally.
We hope that you will look forward to receiving
it every other month. We would also ask that
you please consider helping to pay the cost of
publication by advertising your organization to
our many readers.
Thank you for your support of AGA and our new
magazine. We appreciate each and every one of
our members.
Hot Off The Press!This month your Alabama Grocers Association proudly unveils its digital magazine – Alabama Grocer.
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V I E W P O I N TV I E W P O I N T
The Shopping Path of Least Resistance It isn’t quite the replicator technology fantasized about by “Star Trek,” – with which one could just say, “Early Grey, Hot” to a computer and it would magically appear – but that doesn’t mean it can’t – and won’t – change the world.
The fact is, I think it has the potential to do both.
Earlier this year, we learned that Samsung
had unveiled a new refrigerator at the annual
Consumer Electronics Show (CES) in Las Vegas.
But this wasn’t just a refrigerator. It was a
“smart” refrigerator.
Called the Family Hub Refrigerator, this piece of
equipment comes with a 21.5-inch touchscreen
on one of its doors, which people can use
to shop for products as they run low or out.
Even more impressive, the refrigerator also has
cameras inside that keep track of products as
they are removed, so it can let people know
when supplies are running low. And, people
can access all this information from their smart
phones, and use them to place orders.
Wow. I’m old enough to remember when
refrigerators didn’t even have automatic
defrosting. (Young people reading this will have
to trust me on this. We used to have to unplug
freezers and refrigerators and put pots of hot
water inside in order to defrost them. It was a
total pain in the neck, but a routine part of life.
(Barbaric, huh?)
Samsung said that it has partnered with
MasterCard to provide payment services, and,
to start with, MyWebGrocer, FreshDirect and
ShopRite for online grocery ordering. Needless
to say, these platforms are thrilled.
“Commerce-enabled devices like the Family
Hub refrigerator represent an unprecedented
opportunity for our customers because it puts
them right where the consumer path to purchase
begins: in the kitchen,” said Eric Healy, president
of MyWebGrocer. And Jodi Kahn, FreshDirect’s
Chief Consumer Officer, observed that it created
a “frictionless” and “seamless” road between
shopper and shop.
Bingo.
Not long after Samsung made its announcement,
I got an email from Amazon promoting a new
item available on the site – a Brita water pitcher
that comes with a filter that enables the consumer
to have cleaner, better-tasting water.
Except that this was a pitcher with a curveball
– because this Brita pitcher is WiFi enabled.
KEVIN COUPEFounder
MorningNewsBeat.com
Commerce-enabled devices like the Family Hub Refrigerator represent an unprecedented opportunity for our customers because it puts them right where the consumer path to purchasebegins: in the kitchen.
iStock
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V I E W P O I N TV I E W P O I N T
It comes, the email said, “equipped with a built-in
counter that tracks the amount of water that passes
through the pitcher’s filter. The pitcher itself will
automatically order a new filter through Amazon Dash
Replenishment when the old filter nears its capacity.
This new connected pitcher with Amazon Dash
Replenishment gives Brita owners exactly what they
want – a new Brita filter on their doorstep at the time
they need it.”
Pretty cool.
(I’m tempted here to tell younger readers that I can
remember a time when we had to fetch water from
the well with a bucket and a rope... but I’m not quite
that old.)
The Brita Infinity Pitcher will cost about 45 bucks,
which seems to be about a third more expensive than
most of the Brita pitchers that I found on Amazon...
but the argument is that the tech-driven convenience
will make the price difference palatable. And I have to
say that I think the argument is pretty compelling. Or,
to coin a phrase, it is an argument that holds water.
Innovations along these lines have been much
discussed over the years, and it only was a matter of
time before dreams and reality met in such a way
that products like these could become mainstream.
Without a doubt, we’re pretty much there... products
like the Family Hub Refrigerator or Amazon’s
ecosystem-centric strategies (which are tied to the
Echo, Subscribe-and-Save, the Dash replenishment
system and even the delivery drones that probably
will be flying over our homes one of these days) are
putting us right in the middle of what could turn out
to be a pretty remarkable time. And retailers have to
be prepared to embrace this revolution, which almost
certainly will unfold faster than anyone expects.
Interestingly, Ford and Amazon announced at CES that
they are working on an initiative “granting Ford owners
unprecedented access to their connected-home devices
from their cars, and vice versa.”
And the Amazon ecosystem expands a little more.
What is important to remember here is that once one
buys a refrigerator or a water pitcher, it usually will be
quite some time before you have to replace them. The
refrigerator only has value if it is filled with food that
you want to eat... and the pitcher only has value if you
have the filters that create cleaner, tastier water. And
so it is critical for companies like Samsung and Brita
to find ways to be more relevant and useful... which is
exactly what they’ve done.
One of the things that traditional retailers have to
realize is that the advent of smart appliances and the
expanding ecosystems being created by some retailer
platforms – especially, but not limited to, Amazon –
are combining to create an environment in which it
is less and less necessary for people to actually go to
the store. These progressive-minded companies are
creating paths of least resistance that provide few
reasons for consumers to detour elsewhere.
Not everybody, and not all the time. But enough to
have an impact on a lot of bottom lines.
One of the things that one finds a lot at food industry
conferences is people who like to cast doubt on the
e-revolution. They like to talk about the people who
still want to go to the store, about the hiccups that
can affect click-and-collect or delivery services, about
how rural customers have different needs than urban
customers, and about how selling points like “your
neighborhood grocer” or “hometown proud” or
“old-fashioned service” or similar tropes are enough
for retailers to hang their hats on when competing in
this new environment.
All of this may, in fact, be true. And still not enough
to stave off the impact of technology, especially on a
generation of shoppers that does not remember those
ancient pre-Amazon days.
Not all people, and not all the time. But enough to
create leaks in the traditional market shares of a lot
of retailers and manufacturers. Leaks that are likely to
grow bigger with time.
The future is coming. And it is traveling at Warp Eight. n
One of the things that one finds a lot at food industry conferences is people who like to cast doubt on the e-revolution.
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Preemptive Wage Legislation to Pass Alabama Legislature in 2016ON FEBRUARY 25, 2016, GOVERNOR BENTLEY SIGNED INTO LAW HB174, LEGISLATION THAT
PREVENTS LOCAL GOVERNMENTAL ENTITIES FROM REQUIRING MINIMUM LEAVE, WAGES, AND
OTHER BENEFITS FOR EMPLOYEES.
Representative David Faulkner, along with 52 other
bill sponsors, introduced HB174 on February 9, 2016 so
that local governments can no longer “increase labor
costs within a day or three weeks’ notice”.
This bill was in direct response to Birmingham’s City
Council attempting to create a minimum wage to
$10.10 an hour.
The City Council moved up the effective date for
an $8.50 local minimum wage from July 1, 2016 to
March 1, 2016. The city’s minimum wage would then
increase to $10.10 on July 1, 2017.
On February 22, in response to HB174, the City
Council approved the $10.10 minimum wage in a vote
of 6-2 with the effective date of Wednesday, February
23, less than 24 hours.
Though the effective date was Wednesday, the
ordinance still had to be signed by the Mayor and
published in the paper before it could go into effect.
Birmingham Mayor William Bell signed the bill on
February 25 and it was scheduled to be published in
the paper on Sunday.
The Governor’s signature on HB174 voids this local
ordinance and will save AGA members thousands of
dollars’ in additional wages.
The Alabama Grocers Association took a leadership
role in helping Representative Faulkner to pass HB
174 and worked alongside other major Alabama
business organizations to urge lawmakers to pass this
legislation.
The bill passed the House of Representatives on
February 16 with a vote of 71-31 and went for a debate
in the Senate, where Senator Jabo Waggoner carried
the bill with a 23-11 vote.
This bill establishes the Alabama Uniform Minimum
Wage and Right-to-Work Act. It would further specify
Alabama’s status as a right-to-work state and prevent
local governmental entities from requiring minimum
leave, wages, or other benefits for employees,
and provide the Legislature with the
authority to establish uniform employment
policies and regulations of collective
bargaining under federal labor laws.
HB174 does not create or set a state
minimum wage. Alabama is one of 21 states
that use the federal minimum wage of $7.25,
as the lowest possible wage employers can
pay employees.
A special thank you to AGA member Buy-Lo Quality Foods and Otis McGuire, Human Resource Manager, who testified before the House Committee on behalf of the grocery industry.|
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Associated Grocers of the South, Inc.
3600 Vanderbilt Rd., P.O. Box 11044, Birmingham, AL 35202
For More Detailed Information Please Contact:Billy Leverett
Vice President Of Sales
205-808-4821
hat You Need,
hen You Need It,
or the Lowest Cost!
What You Need,
When You Need It,
For the Lowest Cost!
Doing More Than Expected
Fill Rate–97.5%
On Time Deliveries–97.8%
Willing To Compare
www.agsouth.com
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The Alabama Grocers Education Foundation hosted
its 24th Annual Spring Golf Outing on April 7, 2016,
at Inverness Country Club in Birmingham, Alabama.
This tournament included two flights and raised
monies for the Alabama Grocers Education
Foundation, which funds scholarships to employees
and children of employees of Alabama Grocers
Association companies.
To date AGEF has awarded over $1 million because
of the tremendous support of our members at golf
tournaments such as this one.
The next Alabama Grocers Education Foundation
fundraiser will be a Silent Auction at the AGA
Convention, July 25-27, 2016, at Grand Hotel Marriott
Resort in Point Clear, Alabama.
The Alabama Grocers Education Foundation Golf Outings would not be as successful without the many companies that sponsored this event and contributed their goods.
PRESENTING SPONSOR Bimbo Bakeries
SPONSORS
5 Hour Energy A&R Supermarkets Acosta Sales & Marketing Advantage Solutions/Palermo’s Alabama Crown Alex Kontos Fruit Co. Argo Insurance Associated Grocers of the South
Associated Wholesale Grocers Gulf Division Associated Wholesale Grocers Nashville Division Barber’s Dairy Bevco Beverages Buffalo Rock/Pepsi Bunzl Distribution/Pactiv Byars | Wright Coca-Cola Bottling Company United Inc. Country Delite Farms Dutch Farms EDLINCO
Flowers Baking Company Freeman Foods Frito-Lay Golden Flake Snack Foods Ice Cream Specialists Imperial Distribution Lighting Specialists Inc Merrill Lynch Mission Foods Mitchell Grocery Corp. Mrs. Stratton’s Salads Peake & Associates Piggly Wiggly Alabama Distributing Company
Publix Super Markets R.L. Zeigler Red Diamond Snyders-Lance Super-Valu The Hershey Company United-Johnson Brothers of Alabama Wells Enterprises Wright Specialty Insurance
AGA Hosts 24th Spring Golf Outing
Morning First Place Team Afternoon First Place Team
Morning Second Place Team Morning Third Place Team. Afternoon Second Place Team
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Great News For Alabama Retailers!The Alabama Grocers Association now has a Coupon
Program administered through American Coupon
Services, LLC. Many of our retailers have requested
a program through the Association and now we have
one for you.
The AGA Program is very competitive in the market.
Coupon Highlights:
• Retailers receive face value plus 4.5-cents per
coupon.
• Other than your AGA Membership Dues,
there are no other fees to participate in the
ACS Coupon Program. AGA Membership Fees
are $200 for your first store and $60 for each
additional store. Dues run on a 12 consecutive
month basis from the month you sign up.
• ACS accepts digital, paper and internet coupons.
• ACS is a trusted company that has 40 years of
customer service experience.
• ACS is the Coupon Service that several
wholesalers use for their private label coupons.
• ACS has an online portal where you can check
your shipment information, see when your next
check will be mailed and they can notify you if
you have any chargebacks.
AGA has been working hard
to provide the best in Coupon
Servicing and help retailers get the
best deal on the market.
If you are interested in getting
more information about the AGA
Coupon Program, please contact
Jessica Brown at
Congratulations to this year’s Golf Tournament winners!
MORNING
First Place Team: The Lighting Specialties sponsored team - David Toner, Brian Castillo, Bradley Pate, Tyler Bowen
Second Place Team: Jeff Hoping and Brian Lancaster, Birmingham Bud; Chris Ragusa, Whitfield Foods
Third Place Team: Vernon Price, Steve Melish, Supervalu; David Wright, Ron McClellan, Food Outlet
Closest to the Pin: John Gross, Mrs. Stratton’s Salads
Longest Drive: Ryan Darnell, Merrill Lynch
AFTERNOON
First Place Team: The C&M Food Distributing Team - Brayden Bell, CD Denson
Second Place Team: Naseem Ajlouny, David Bullard, Piggly Wiggly Alabama Distributing Company; Jeff Brown, Country Delite; Sean Wright, GVH Distributing
Third Place Team: Harold Shivers, Richard Sprayberry, Alex Kontos; Tim Nicolson, Clark Roper, Piggly Wiggly.
Closest to the Pin: Paul Whitley, Bimbo Bakeries
Longest Drive: Brayden Bell, C&M Food Distributing
Afternoon Third Place Team
Steve Shelton, Donald Moore, Dale Smith, Darwin Metcalf, Western Supermarkets
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Always the best news of a session is that both budgets were passed into law, even if the Legislature had to override the Governor’s veto of the General Fund budget which was 1.85 billion, a 5 percent increase over last year.
The $6.3 billion Education Trust Fund budget passed included a 4 percent cost of living raise for educators making $75,000 or less and all others receiving a 2 percent increase.
The increase budget will also allow for full funding of teachers’ retirement, as well as the hiring of 475 additional teachers and provides for $16 million for
Alabama’s limited, voluntary pre-K program, enough to add 2,800 4 year olds to the program.
The biggest and best news is that we stopped Birmingham and other local governments from increasing the minimum wage within their jurisdiction. That would have created a nightmare patchwork quilt of local laws to comply with.
AGA took a leadership role in helping Rep. David Faulkner of Mountain Brook to pass HB 174, which prohibits local government action. It also establishes law that only the Legislature can enact laws relating to minimum wage and other labor laws in Alabama.
Legislative Session Ends With A Bang,
and A Whimper
THE REGULAR LEGISLATIVE SESSION OF 2016 ENDED WITH BOTH A BANG AND A WHIMPER ON MAY 4. ONE NEEDED A PROGRAM TO KNOW WHICH GROUP WAS FILIBUSTERING AND DELAYING ACTION AT ANY GIVEN TIME. IT GOT SO BAD THAT NEAR THE END, HOUSE BLACK CAUCUS MEMBERS WERE HOLDING HANDS AND SINGING “WE SHALL OVERCOME” TO PROTEST THE HOUSE GOP CUTTING OFF DEBATE ON BILLS.
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On June 10, Speaker Mike Hubbard was found
guilty of 12 of the 23 ethics charges that he wrongly
solicited consulting contracts and investments and
used his office to benefit his businesses and clients.
But this session will likely be best remembered for what didn’t get done. Despite pleas from Medicaid officials needing $85 million in additional dollars, the budget only provided an additional $15 million.
But late in the session, the House passed an agreement to give Mobile and Baldwin Counties a lion’s share of the state’s BP settlement money for roads, but it would have placed an additional $70 million in Medicaid for next fiscal year.
The bill was blown up in Senate committee, however, when north Alabama legislators refused to allow $191 million of the settlement go to the two coastal counties, insisting the money be spread across the state for road improvements.
If Medicaid is not fully funded, we risk losing almost $800 million in additional federal dollars to implement a new system of regional care organizations, aimed at trimming the growth of Medicaid’s needs.
The other major issue that failed was the Governor’s prison bill. He proposed an $800 million bond issue to build four new super prisons, closing 13 of the 15 current state prisons. Members had lots of questions about where the prisons would go, how the bonds would be repaid, etc.
The Senate took three separate stabs at coming with a solution, and did finally approved a conference committee report paring the proposal down to $550 million. But it arrived in the House 25 minutes before the session ended, and the Speaker did not feel that was sufficient time to consider so many substantial changes. So it died.
Governor Bentley said last week he would likely call a special session to bring these two issues back, but said everyone “needed a rest” right now.
The House also set up a process for the possible impeachment of Governor Bentley, and Rep. Ed Henry succeeded in gathering the necessary signatures to file a notice of impeachment. The House Judiciary Committee has begun holding its first meetings. Many say the Governor will be loath to call a special for fear that effort may gain steam.
On June 10, Speaker Mike Hubbard was found guilty of 12 of the 23 ethics charges that he wrongly solicited consulting contracts and investments and used his office to benefit his businesses and clients. Each count is punishable with up to 20 years in prison.
With the conviction, Hubbard is automatically removed from office but maintains his innocence and an upcoming appeals process. He has served District 79 in Lee County for the last 18 years and was instrumental in the Republican takeover of the Alabama House and Senate.
There is lots of fun in the days ahead as members of the House will be jockeying for position and for the election of a new Speaker.
Victor Gaston, House District 100 in Mobile County is the acting Speaker and will remain so until a new Speaker is elected by a vote of the full House of Representatives at the beginning of the next legislative session.
HB174 does not create or set a state minimum wage. Alabama is one of 21 states that use the federal minimum wage of $7.25, as the lowest possible wage employers can pay employees.
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Peter J. LarkinPresident and CEO National Grocers
Association
Debit Card Swipe Fee Reform A Step in the Right DirectionCONGRESSMAN NEUGEBAUER (TX-19) RECENTLY INTRODUCED H.R. 5465, A BILL TO REPEAL
SWIPE FEE REFORMS, ALSO KNOWN AS THE DURBIN AMENDMENT PROVISION, WHICH PASSED
AS PART OF THE DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT
BACK IN 2010.
Repealing the Durbin Amendment, which placed
a cap on debit card swipe fees and introduced
competition into the debit routing system, would only
serve to increase profits for big banks while hurting
businesses and consumers.
Lower debit swipe fees have allowed supermarkets
to pass along savings to consumers in the form of
extended sales and have allowed grocery stores to
maintain consistent prices even during shortages that
would otherwise result in price spikes.
Consumers have also seen benefits in ways that
directly contradict the
predictions of the banks.
Despite banks insisting that
the Durbin Amendment
would be the end of free
checking for consumers,
free checking has increased
from 53% to 61% since
Durbin was implemented,
according to the American
Banking Association’s own
numbers.
Economist Robert Shapiro has noted that consumers
saved more than $6 billion in the first year after the
Durbin Amendment went into effect.
H.R. 5465 would send those savings directly back to
the 1.4% of all banks that are held under the Durbin
Amendment (only banks with more than $10 billion
in assets are covered under the Durbin Amendment).
The Durbin Amendment has worked for consumers
and businesses for the last six years and began to
introduce competition into a system dominated by
two major companies.
We need to ensure more
competition within
the debit market - not
remove it. The Durbin
Amendment was a step
in the right direction,
now is not the time to
take two steps back. n
iStock
Alabama’s Food Industry Finest10 a.m.Wednesday, October 26, 2016The ClubBirmingham, Alabama
Event Highlights:
• Legislative panel• Keynote speaker: Dr. Kevin Elko• Annual Best Bagging Contest• Retailer, Wholesaler & Vendor of the Year Awards
M a r k Y o u r C a l e n d a r
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Not Your Everyday DishesFind Blue Moon® recipes at bluemoonbrewingcompany.com
©2016 BLUE MOON BREWING COMPANY, GOLDEN, CO BELGIAN-STYLE WHEAT ALE BREWED WITH CORIANDER AND ORANGE PEEL
On February 24, 2016, Autry Greer & Sons, Inc.
(Greer’s) proudly announced it turned 100 this year!
Founded in 1916 by Autry Greer, the company is 5th
generation family owned and operated and committed
to serving customers and communities in and around
their 34 locations in Alabama, Mississippi and Florida.
OUR STORY
In 1916, Autry Greer, founder of Greer’s,
opened a grocery store on the Northwest
corner of Water and St. Michael Streets,
in Mobile, Alabama.
This store was a pioneer in the Cash and
Carry food store concept. Self-service
soon followed and evolved to today’s
modern supermarkets.
The Greer’s store at Water and St.
Michael was the first and, for a long
time, the only store in Mobile to
advertise prices. These prices were the lowest in town because
other stores sold on credit and delivered.
Greer’s has always had a philosophy of offering its customers
the highest quality at the lowest prices possible. The public
response was great. Success was accomplished only as a result
100 Years of Service
Autry Greer
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of the founder’s determination, the confidence of
one banker and two suppliers, family, teamwork and
sacrifice.
As the sons of Autry Greer became of age, they
involved and dedicated themselves to the business.
Autry’s three sons who were active in the business
for over sixty (60) years were Autry Vidmer “Jack”
Greer, Joseph Barton Greer, Sr., and Elijah Sumner
“Bussie” Greer.
The business operated as a partnership until 1958
when it incorporated with the founder Autry Greer,
as Chairman of the Board.
In the 1980s some family members (Bussie Greer
and Mac Greer) were bought out and is now owned
by Jack V. Greer,
Jack V. Greer,
Jr., J. Barton
Greer, Jr. and
Robert A. Greer.
The Board
of Directors
currently
consists of: J.
Barton (Bartee)
Greer, Jr., Chairman; Jack V. Greer, Sr., President;
Robert A. Greer, Vice President and Secretary; Jack
V. Greer, Jr., Vice President and Treasurer; and O. M.
“Mac” Otts, III, Chief Financial Officer.
Additional Greer family members have joined the
family business in the last ten (10) years so the
family business can continue to develop leaders
for the future: Jan Greer Endfinger (Director of
Human Resources and Marketing); Stephen Thomas
(Director of Operations); Lucy Greer Cheriogotis
(Corporate Spokesperson, Corporate Chef & Director
of Deli/Bakery/Catering); Gray Fobes (Perishable
Operations/Meat Department), and Les Buerger
(Perishable Operations/Produce Department).
In 1967, Greer’s constructed a state of the art
distribution center with attached corporate
headquarters. This distribution center supplied all of
its stores for 40 years.
In 2007, Autry Greer & Sons, Inc. became affiliated
with Associated Wholesale Grocers (AWG), one of
the nation’s largest independent grocery co-ops.
Greer’s currently operates 34 supermarkets located
in Alabama, Mississippi and Florida.
In 2014, the Company partnered with
Ace Hardware Corporation, a retailer-
owned hardware wholesaler that
began operation in 1924, to bring
groceries and hardware together
in one place.
Greer’s currently operates
two Ace Hardware Express
locations - Mobile and
Quitman, MS – with its third
location to open inside its
newest store opening in Bay
Minette, AL. Greer’s is proud of
the Ace venture as the Company
was in the hardware business many
years ago and feels combining groceries
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and hardware in one convenient location ism ore
relevant than ever to customers looking for one stop
shopping for their household needs.
THEN AND NOW
We feel one of the greatest joys of
a family business is for different
generations of people to work
together and learn from each
other. The old teach the young
and the young keep the old ones
feeling young and energized –
all throughout the business.
At Greer’s there is no mandatory
retirement age. As long as you’re
young at heart, you’re good to go!
“Coming full circle to our
beginnings in downtown
Mobile to our newest store at
the corner of Government and
Broad, Greer’s has been here
for 100 years. Here for Good.
Good for our people. Good for
our customers. Good for the
communities we serve.” Robert
Greer added.
Today, what Greer’s shoppers
will find is that Greer’s is
Different in many ways from
other large chains. It is the
best way to save money on
the family’s food bill! Greer’s
customers will find an expanded
selection of FRESH produce
and many locally grown items,
a variety of grocery items filled
with national brands and its Best
Choice and Always Save award
winning private label brands,
many organic products and
health foods.
Greer’s shoppers will also find the FINEST of meats
cut fresh daily by their skilled market professionals --
TOP QUALITY, Black Angus Beef, All Natural Pork
and Chicken. Greer’s has always been committed to
selling only quality products – that has not changed
From the Family: “We are blessed and humbled to have
reached our Centennial Year and are
excited to share this year of celebration
with you. We know that we have reached
this milestone with the commitment of
thousands of associates, the loyalty of
hundreds of thousands of customers
and the much-valued support of our
many business partners. No matter
when you became a part of our Greer’s
family, some for many generations, we
appreciate you being with us along the
way. Thank you for believing in Greer’s
and for helping us do so many good
things for our associates, customers and
the communities we have served for 100
years!“
in 100 years – our customers can always depend on
quality!
“The trucks have changed but Greer’s quality, service
and commitment to our customers has not! More for
Your Money! Simple As That!” says Lucy.
While Greer’s invites all to enjoy celebrating a
century in the grocery business with us this year,
the current company leaders prefer to focus on the
future.
We love the challenge of changing with the times for
our customers, and we already see new technologies
and our new generation 5 leaders taking us in new
exciting directions.
Our Greer’s vision: To bring added joy, well-being
and value to people’s lives! Is a service vision that is
ageless.
As Jackie Greer likes to say, “We’re not 100 years old,
we’re 100 years young!
For additional information, please contact Jan Greer
Endfinger, Director of Marketing, at jendfinger@
greers.com.
SPECIAL MEMORIUM
Mac’s daughter Vidmer also worked in the business
for a while in the late 1970’s and lives in Mobile. Her
mother Ann Tiffin also lives in Mobile.
Lucy Greer and her Grandfather Jack V.
Purin
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adem
arks
are
ow
ned
by S
ocié
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es P
rodu
its N
estlé
S.A
. Prin
ted
in U
SA.
eric, logistics Manager & His dog, chewbacca
Makes Beneful. Feeds Beneful.
“We can tell you every ingredient that went into that bag -- and trace it back to where it came from. Pretty amazing.”
Go to Beneful.com/our-people to learn more from the people who know it best
G R E E R ’ S T U R N S 1 0 0CONTINUED
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“Our Greer’s vision: To bring
added joy, well-being and
value to people’s lives! Is a
service vision that is ageless.”
Purin
a tr
adem
arks
are
ow
ned
by S
ocié
té d
es P
rodu
its N
estlé
S.A
. Prin
ted
in U
SA.
eric, logistics Manager & His dog, chewbacca
Makes Beneful. Feeds Beneful.
“We can tell you every ingredient that went into that bag -- and trace it back to where it came from. Pretty amazing.”
Go to Beneful.com/our-people to learn more from the people who know it best
F E AT U R E T I T L EBYL INE/CONTINUED
There’s still a major need for retailers to achieve economies of scale,especially as they face specialist competition that has a much lower cost base.
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M E R G E R S A N D A C Q U I S I T I O N SBY LEN LEWIS
T
simple – economic fundamentals are sound, the need to acquire expertise and distribution is essential; and there are plenty of strong regional chains and independents looking to wed.
“There’s a lot of interest in the grocery sector,” said Brian Todd, president of The Food Institute. “Private equity firms have a lot of cash on hand and are looking for a profitable investment rather than starting up something new. Some are just looking for a safe haven for cash.
“Meanwhile, some family owned chains, especially third- or fourth generations are looking to cash out,” he adds. “Also, grocery is seen as a lot sexier business than it used to be.”
Joel Rampoldt, retail and consumer lead for KPMG Strategy noted: “There’s still a major need for retailers to achieve economies of scale, especially as they face specialist competition that has a much lower cost base. The ability to spread out things like distribution, marketing and sourcing costs and SG&A across a broader perimeter is imperative.”
His comments underscore KPMG’s 10th annual survey focusing on the outlook for M&A activity across a wide variety of industries this year.
The executive survey, conducted in partnership with FORTUNE, anticipates an acceleration of M&A
activity this year and an increase in the average deal size. The average value per acquisition will be less than $250 million, according to 52 percent of respondents.
While not focused strictly on retailing, the survey found that 38 percent of executives surveyed will initiate between one and three acquisitions this year. And the vast majority of deals will be in the U.S. given the relatively strong economic outlook.
About 12 percent of those surveyed expect the consumer-retail market to be among the most active in M&A activity this year.
The need to get bigger in new markets is not necessarily driving M&A at retail, according to Rampoldt.
“It’s about elevating capabilities,” he says. “When you think about all the things that retailers need to be good at – everything from pricing and promotions to localized assortment – it’s obvious they need to be sharper than they were five years ago.”
Rampoldt says its especially true when it comes to amortizing the cost of those capabilities over a bigger store base.
“The ability to execute better and drive more sales and EBIDTA out of every square foot requires capabilities and, in some cases, technology,” he says. “It’s a totally different game. Retailers must be more data driven in order to make a rapid response.”
No one is ruling out the possibility of more mega-deals this year since, as Todd put it, “There are always surprises.”
However, with the industry coming off a year of mega-mergers, the total number of stores involved in merger activity this year will be down, according to David W. Schoeder, principal in The Food Partners, a Bethesda, Md.-based investment banking firm, providing merger, acquisition and divestiture and restructuring services to the food industry.
“But over the next 36 months, we’re going to see consolidation driven by two factors,” he says. “First, if you’re operating a conventional store you’re probably in denial. You have to be focused on
2015 was a record
year for all merger
and acquisition
activity and 2016
might hit the same
heady heights
he reasons are
BY LEN LEWIS
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M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p. 23
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operating a conventional store with a twist. Otherwise you won’t be in tune with the new world order and what it takes to be successful today.”
Schoeder says the other factor is an aging group of independents with no succession plan. Many of those will probably exit over the next 36 months and the majority of stores will be sold to other independents.
These are the ones Schoeder called “pac-men” who have grown by gobbling up others.
“These are the super independents,” he says. “They’ve got management teams in place, they’re generating cash flow and have the money to reinvest and buy stores as they become available and make them far more successful.”
Rampoldt also expects to see smaller chains absorbed by larger counterparts if the multiples are attractive to both sides.
“Most grocery retailers are not truly nationwide, so filling in their portfolio is always attractive,” he says. “This will probably happen more in supermarkets than other classes of retail.”
This is also true for independents who are not only selling out but interested in buying new locations to expand their territory, said Todd.
“Competitive concerns are also driving deals,” Todd says. “Everyone’s selling food – dollar stores, convenience stores, clubs and other alternative formats. Retailers are looking to protect their market or expand into new ones to increase sales and profits.”
Clearly some geographic areas are more ripe for deals than others, Todd said, noting that the Southeast and, to some degree, the Southwest are still growing. Some secondary markets can be attractive due to their low capital costs, but it’s the major metro areas with built-in demographics that are more appealing. The economy in and of itself will have little impact on
consolidation, according to Schoeder. What does have an impact is availability of credit, he said, noting that some banks shied away from lending to grocery stores after the Haagen and A&P bankruptcies.
“They’re still very skittish,” Schoeder says. “The ability of a private equity firm to get a deal done at a higher multiple is based on their borrowing more money, not putting more equity into it,” he says.
“You used to be able to borrow four times the cash flow to get a deal done,” he says. “The debit to cash flow ratio is probably off a bit for strategic buyers. But everything depends on the quality and vision of the operators. You have to have a credible plan and the bite size has to be manageable.”
But scrutiny by lenders could be eclipsed by that of government agencies.
“The Hagen debacle embarrassed the Federal Trade Commission,” Schoeder says. It even slowed down the Ahold/Delhaize merger he said, noting that the FTC is doing an internal investigation to see what went wrong.
Nonetheless, Schoeder believes the agency’s stance is still far more liberal than it was 10 or 15 years ago.
“The focus now is making sure there are credible buyers that can operate the stores to be divested,” he says. “Their mandate is to make sure there is a viable competitor to maintain competition in the marketplace.”
Meanwhile, Rampoldt believes the U.S. supermarket industry is still attractive to overseas buyers.
“I worked a lot in Europe,” he says. “The competitive intensity there is enormous and the ability to grow by opening new units ended decades ago. We’re only just getting to that life stage in the U.S., yet there are still lots of places to grow by opening new stores and increasing square footage.”
So you want to sell the business or maybe buy another one but can’t find the right partners?
A former Italian comedy writer and MBA v, Brian Pallas, has come with a unique idea called the Opportunity Network designed to connect nearly 6,000 ceos and owners of family businesses with potential merger and acquisition partners in 75 countries.
Opportunity Network is headquartered in London, but the company now has offices in New York and Barcelona along with reps in cities like Dubai, Paris, San Francisco and is in the process of moving into Asian markets.
The business has been described as something like the Craigslist of mergers and acquisitions. Members can list businesses anonymously and connect with another that they think might be a good fit. However, there is a minimum deal size of $1 million.
The app enables members to filter the deal by size, location and industry. So, if you’re tired of looking for bargains on golf clubs or restaurants, you can shop around for another company.
“There are plenty of examples of successful retailers being owned by
non-merchants,” he says. “In many cases they try to free the business
by shifting investment and assets from things that don’t do anything
to things that do and improve the customer proposition.”
Continued on p. 26
The ONLY Federal Credit Union in the United States chartered to serve
grocery industry employees and their familieswww.trugrocer.com
M E R G E R S A N D A C Q U I S I T I O N SCONTINUED
Continued from p. 24
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Foreign investors might also be attracted to acquiring stores for alternative delivery formats like “click and collect,” according to Rampoldt.
“It’s very big in the UK and France and those who have cracked it in Europe may see a greater opportunity to do it in the U.S.,” he says. “In fact, it may be more attractive than just buying a company for brick and mortar (sales). It’s inherently more complicated, but I wouldn’t be surprised if many companies weren’t thinking about it.”
However, entry as a startup, like the route that German deep discounter Lidl is taking, is certainly feasible.
“They decided not to come in through acquisition but it all depends on the format. It makes sense to grow organically if you’re operating a format that appeals to a specific segment of customers. Where you site those stores is key,” he said, noting that an acquisition would not necessarily provide this flexibility.
When considering acquisitions, a strong cultural fit continues to be essential.
“If you look at the companies that have been successful you’ll see that they’ve paid a lot of attention to individual cultures when bringing two firms together – with associates, the culture they project to their customers as well as the pace at which they make changes,” he says.
“Companies that go slowly tend to do better than those that put their names on the building and open a completely different operation the next day. ”
You’ve got to think about the customer experience and protect the one-on-one interaction between customers and associates,” he adds. “It’s important that the quality of that relationship is not jeopardized.”
But the trickiest part of any acquisition may be the decision involving central vs. local control and how much autonomy the regions and stores will actually have.
“It’s critical to get right,” Rampoldt says. “There are examples of both strategies being successful, but you have to be one or the other.”
Asked whether buyers are shying away from turnaround situations, he replied: “Not really. There’s still an appetite for that when the price is right and it’s clear what levers have to be pulled to turn the acquired company around.”
This is especially true for private equity firms who are likely to continue acquiring retail operations.
“They like businesses where they understand what to do to get results,” Rampoldt says. “They’re very good about basic blocking and tackling around inventory management, distribution, store operations and efficiency. Those things are cause and effect in retail and private equity firms have a good idea of what to do, what they have to put into the business and how long it will take before they get out.”
But, he quickly noted that acquisitions are not necessarily a short-term play for private equity firms.
“There are plenty of examples of successful retailers being owned by non-merchants,” he says. “In many cases they try to free the business by shifting investment and assets from things that don’t do anything to things that do and improve the customer proposition.” n
37%Entry into new businesses
37%Expand customer base
36%Expand geographic reach
34%Enhance Intellectual
Properties, or acquire new
technologies
25%Opportunistic-target
becomes available
16%Acquiring additional
supply chain elements
25%Opportunistic-target
becomes available
16%Acquiring additional
supply chain elements
WHAT’S DRIVING ACQUISITIONS IN 2016?
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Real WaySweet!
theto do ™
Free-Flowing Pure Cane Sugar and Honeyto easily add a sweet honey flavor to teas, cereals, or tomeasure for recipes. Sprinkle a taste of Honey!
Honey Granules.
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Pourable Brown SugarA delicious brown sugar that pours neatly and doesn’t harden – perfect when needing a small amount as a topping or in a recipe.
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F E AT U R E T I T L EBYL INE/CONTINUED
It wasn’t so long ago that sustainability for a grocer
meant breaking down cardboard for scrap collectors
and giving the local Boy Scout troop a spot near the
store entrance to collect bottles and cans. Locating
a market for recycled wood and metal was almost
considered progressive.
Today, sustainability has become an essential
part of every business across the nation.
California consumers lead the nation in the
demand for preservation of our planet and its
resources; sustainability is no longer an option,
it’s an expectation for customers. And, where our
customers go, as they say, we follow.
Take Kroger, for example. In the middle of their
49-acre campus in Compton, Calif., sits the first-
in-the-state anaerobic digester. Billions of bugs
cleaning up the environment under the Ralphs and
Food4Less banner.
“Our perishable food program donated $4 million
of food to our community partners last year,” states
Kendra Doyel, Vice President of Public Relations and
Government Affairs for Ralphs/Food4Less. “Food
which can’t be sold or donated is run through our
anaerobic digester which converts food to fuel. This
fuel powers about 20 percent of our home offices,
our warehouse, the creamery and the transportation
center – all located at our Compton facility.”
“The digester has reduced diesel truck trips by
500,0000 miles each year – miles we used to drive to
take food to our composting center. It also cleans up
about 29,000 gallons of wastewater, every day, from
our creamery.”
By Cassandra Pye
For years now, there’s been a quiet movement under way on the part of the food industry to save the planet.
These efforts are important to consumers, they shave operating costs in a variety of ways, they align with a complex and intricate supply chain and they’re having a real impact on the industry’s environmental footprint. Best of all, these sustainability efforts are…well, sustainable.
iStock
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S AV I N G T H E P L A N E T … Q U I E T LYBY CASSANDRA PYE
Wastewater from the creamery is mixed in with food
waste – including packaging – creating a “milkshake”
which is heated and fed to the bugs. Upwards of 150
tons of food waste is processed each day. The result:
the equivalent of power for 8,000 homes, annually, is
produced to support the facility.
And, clean water – a byproduct of the process – is
reused. Doyel says the company is now looking at
ways to eventually use particulate matter as compost.
The processor sits in a compact space and, according
to Doyel, is both odorless and emits very little noise.
“This is a fairly unique project,” says Doyel. “There
are anaerobic digesters all over the world but this one
sits in the middle of an urban area, surrounded by
businesses, homes and people. We’ve been operating
the project successfully for three years.”
Ralphs/Food4Less also engages in traditional
sustainable practices, recycling about 7 million
pounds of cardboard, plastic and metal, annually.
“And, we’re also helping our customers live a more
green lifestyle by offering recycling inside our
stores, offering green products – like light bulbs, for
example – which help them to save energy,” she says.
For Ralphs, she adds, sustainability means striving
to reduce the company’s impact on the environment
by using natural resources responsibly while
minimizing waste in their operations.
Brian Dowling, Vice President for Public Affairs for
Albertsons-Safeway, says the term sustainability, over
the last decade, has evolved.
“I would say sustainability wasn’t a term that was
tossed around too much,” Dowling said. “But if I look
at what companies did 10 years back it was about the
environmental footprint – so recycling, collecting
cans, cardboard, etc.
“If you look at where it is today, it’s an opportunity
for companies to create value for their organization
and do good for the broader community at the
same time.”
Albertsons-Safeway, whose 14 operating divisions
include Acme, Shaw’s and Jewel in the east and
midwest and Vons on the west coast, has taken
environmental stewardship to a whole new level.
“Sustainability has been at the root of what we do –
for a long time,” says Dowling. “Recycling cardboard
and plastic didn’t get headlines but our efforts in
recent years – on the seafood side and, more recently,
on the human trafficking side of the business – are
taking things to a whole different level.”
Whole different level, indeed. The nation’s second-
largest grocery chain is close to hitting
an unprecedented target for seafood.
“In the seafood space, our goal was to
have all of our fresh and frozen label
sustainably-sourced by end of 2015,”
states Dowling. “Although we did not hit
our target for fresh, we were pretty darn
close with our frozen – at 99 percent.”
Dowling says that in fresh [seafood], the
challenge is there aren’t good alternatives
available yet.
“So we’re really working hard with that
industry and that objective continues
– especially now that we’re a larger
company,” he says. “We don’t have a goal
yet, but we’re working with FishWise and
expect to wrap up by June.”
FishWise is a sustainable seafood
consultancy that promotes the health and
recovery of ocean ecosystems through
environmentally responsible practices.
Dowling says Albertsons-Safeway will
establish a goal for all of its banners.
Sustainability efforts are in play on land,
as well as sea.
“Legacy Safeway stores did recycling,
starting in the 1960s,” recalls Dowling.
“In California, we have the opportunity
to also backhaul and aggregate materials like
cardboard, soft and hard plastic, metal, wood. But,
we’re also focusing more on food waste.”
Dowling says Albertsons is taking a tiered approach –
expanding its partnerships with food banks to be able
to get food that’s at the point where it can’t sell it but
can get it to food pantries by sell-by dates.
“We’re always looking for new alternatives; if we can’t
send product to a food bank but don’t want to send to
a landfill, then we can compost it or send to farmers
for animal feed,” he says. “Our objective is to move
towards zero-waste.”
JUST THE NUMBERS: ALBERTSONS -SAFEWAY
n Over 22 million pounds of soft plastic (plastic film and grocery bags) recycled.
n Well over 104,000 tons sent to compost or animal feed.
n 29 million pounds of seafood transferred to responsible sources since 2009.
n First retailer in the world to offer Fair Trade Certified seafood – sushi grade tuna.
n Set a goal to source 4.8 million pounds of CSPO (certified sustainable palm oil) in 2016 that is either mass-balance and or segregated for Own Brand items.
n Set a goal to source only cage-free eggs for store operations by 2025, based on available supply.
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S AV I N G T H E P L A N E T … Q U I E T LYCONTINUED
The Albertsons-Safeway distribution facility in Tracy,
Calif., is one of several which has achieved zero-waste
status.
Dowling says his company is now constantly
examining every part of their organization –
products, community, employees – against what
can be done for the planet.
“There’s also been a shift in consumer attitudes and
what they expect companies to do in this area,” he
asserts. “There are real issues in seafood supply so we
want to provide product for our customers but do so
in a responsible way.”
The Albertsons-Safeway partnership with FishWise
was established in 2009 and the organization,
Dowling states, continues to counsel and advise
the company on seafood issues. He adds that the
organization is showing retailers ways to continue to
sell a lot of product
but do so in
a responsible
way – for many
years to come.
“We’re a penny-
on-the-sale
business,” says
Dowling. “That
makes us look
carefully at
opportunities to
save on water,
energy, shipping
costs. All these
efforts make
good sense for the business; there’s a duality which
drives what we do.”
For Richard Draeger, Chief Operating Officer,
Draeger’s Market, San Mateo, Calif., sustainability is
a collection of practices.
“It’s not one thing, it’s pretty much everything,” he
suggests. “It includes energy-efficiency initiatives,
recycling programs – including containers but
also hazardous waste. It has a lot to do with energy
renewables that you employ as part of your overall
energy consumption.
“We don’t want to burn energy,” he says. “After labor
and labor-related costs, it’s the next highest line item
for our company. We’re trying to mitigate cost.”
And, he says, his company is looking at everything
because as a small company “we’re looking at decent
paybacks – often five years for many of these items,”
he states.
“We’ve got R-30 [insulation] on our rooftops and
R-19 on our walls,” Draeger says. “We’re looking at
photovoltaic energy production for our facilities and
at the moment we are looking at “Bloom Boxes”* –
cogeneration of energy derived from natural gas – for
our operation.”
Draeger says LED lighting – lighting, in general, for
that matter – is incredibly important to lower costs
and sustainability.
“We’ve changed lighting, literally, throughout our
stores,” he says. “There will not be a traditional light
anywhere. For our Los Altos store (where they’re
rebuilding the store, from the ground up, adding
25 percent more square footage), we’re going to
include photovoltaic energy production, we’re also
considering Bloom Boxes and anything else that’s
sustainable.”
Including food.
“The food we select for sale is sustainable,” says
Draeger. “The more we accept from local vendors
– especially produce that’s considered much more
sustainable as those from distance sources – the
better. We’re also using better refrigeration gases;
so much has changed – including those more
dangerous gases from years ago.”
What do Draeger’s’ customers think?
“Consumer response is always positive,” Draeger
insists. “They like to see that you employ sustainable
practices. For example, we’ve just started on closing
our open merchandised refrigerated fixtures
with doors – really nice glass doors on all of our
refrigeration fixtures – that’s sustainable.”
Draeger also thinks that when a customer looks at
sustainability, they’re really looking at the types of
foods a retailer is presenting to them in the produce
department – buying locally, and folks who are within
Continued from p. 29
Ralphs Grocery Company’s anaerobic digester.
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S AV I N G T H E P L A N E T … Q U I E T LY
60-100 miles of your store. He says consumers notice
that and they’re willing to pay for it.
“We don’t waste a whole lot of food either, to be
honest with you,” says Draeger. “Most of it is
backhauled. We get rid of a lot of organic waste that
way. Not all communities we’re in provide backhaul
to the farms. It’s expensive to do that for a small
retailer. But, if you’ve got a community providing the
service, it’s more cost effective to do it that way.”
Draegers recycles materials often.
“Those things aren’t even on the radar,” says Draeger.
“They’re happening on the natural and have been for
a long time.”
The updated Los Altos store will have more natural
lights by way of skylights and windows. And, there
will be charging stations for electric vehicles (EVs).
“Again, these communities are maturing and these
technologies are now available – so we provide the
support services to our customers.”
Draeger also poses a challenge to the industry.
“The better we become at messaging [about] what it is
that we do, the greater customer appreciation would
be,” he insists. “That’s the trick. You do these things
as a business and don’t necessarily tout what you do.
It’s important to do that.”
Draeger says they tell their customers about his
company’s reusable bag program and some of the
energy efficiency programs they carry out with
the support of Pacific Gas and Electric Company –
including electronic control monitors and variable
speed compression motors, all aimed at lowering
energy usage – but they can always tell customers
more of that story.
Albertsons’ Brian Dowling also sees a future where
retailers begin to collaborate more on these efforts.
“Early on,” he says, “the work we did made us
independent of other retailers. It’s not going to
happen that way anymore.
“The supply chain is where there is greater
opportunity now for companies and others to have
an impact,” says Dowling. “We were looking at our
own four walls and spent the last few years reducing
our footprint through our own initiatives. Now, we’re
looking at the supply web – that complex mix of all
involved – and deciding where opportunities for
sustainable efforts exist.”
Human trafficking in the seafood supply chain, for
example, is complex and difficult to monitor, says
Dowling. Specifically, where it’s happening and to
whom.
“That’s where the opportunity exists now,” he says.
“There’s so much more collaboration possible that
includes the industry, governments, NGOs and
others. We need everyone at the table to discuss these
issues because they are larger than our companies.”
Doyel, Dowling and Draeger mimicked each other’s
remarks on the question of why sustainability.
Doyel: “These efforts are in line with our core values
for our customer and our community.”
Dowling: “They are good for the planet and good for
our business, too.”
Draeger: “We’re doing good and doing good for the
business.”
In all cases, customers win. n
Cassandra Pye, is CEO of 3.14 Communications, LLC, a regular contributor to New Jersey Grocer.
**The Bloom Energy Server (the Bloom Box) is a solid oxide fuel cell (SOFC) power generator made by Bloom Energy, of Sunnyvale, California, that can use a wide variety of inputs (including liquid or gaseous hydrocarbons[1] produced from biological sources) to generate electricity on the site where it will be used.
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“The Food Futures Lab is one of our longest
running programs,” said Rebecca Chesney,
research manager for the Lab, who also oversees
the group’s 10-year forecast program.
“We look at cities, food, water issues and every
year, we take a different angle,” she said. “This
year one of our goals is to focus on kids and how
these digital natives will impact the business
model we use and how to communicate with
them.”
Other studies have also led IFTF into areas that
might be closer to impacting today’s food retailers
when it comes to consumers and employees.
“Our workable futures initiative is looking at the
‘gig’ or on-demand economy and how it’s going to
affect things like health insurance and social safety
nets,” Chesney said.
“Basically, the work landscape is changing and
more people are becoming freelancers and moving
away from the traditional jobs and locations.
A lot of people are trying to figure out what benefit
structure they’ll need in the future and how to do
things differently.”
The goal, according to Chesney, is to get people to
think beyond next week or the next quarter when
shaping their (business) strategies.
Furthermore, the loss of traditional benefits or
reduction of the traditional 9–5 workday will start
to impact what people eat at lunch, how they
socialize and redefine work and school days.
“For example,” she said, “Uber drivers might
make most of their money at night. In this kind of
fragmented workplace, we have to look at the types
of foods they need, where they’re eating them and
what they’re shopping for.”
That means mapping food experiences – not only
eating food but also packaging branding, accessing
food – the entire food experience.
The eminent British statesman Winston Churchill once said: “It’s always wise to look ahead, but difficult to look further than you can see.”
Difficult as it may be, but that’s exactly what the Institute for The Future, a Palo Alto-based think tank and non-profit research organization, is doing through diverse projects ranging from global economics and generational trends to technological developments – all of which can yield interesting insights into where and how people will live, eat and shop in the decades to come.
33Continued on p. 34
By Len Lewis
Continued from p. 33
E X P L O R I N G T O M O R R O W T O D AY BY LEN LEWIS/CONTINUED
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“And access to food impacts where we get our food,”
she added. “Retailers need to think about that today.“
The Institute is not only tracking the further
fragmentation of retail, but the next iteration of
retailing, which is likely to be a mixture of on-demand
and fully-automated food delivery, the latter of which
could be about 10 years away, according to Chesney.
As an example, she cited Amazon’s Subscribe and
Save program which offers consumers up to 15
percent savings on recurring delivery of everyday
items like toilet paper, paper towels, flour and
baby wipes.
On another level, Amazon Dash is partnering with
companies like Britta to develop a filter that can track
how much water a consumer is filtering using the
company’s system.
“It’s tied to your Amazon account and knows how
much water you’re using, when you will need filters
and automatically orders them for you,” she said.
“It’s a different type of online retail that changes
the extent to which consumers are involved in
shopping decisions.”
Cheney said itt’s a new purchasing pathway that’s not
been fully researched and brings up the question of
how much consumers will care about brands in the
future and whether they will simply tell Amazon to
send them the cheapest item in any given category.
However, customer involvement could increase in a
different way.
Consider a San Francisco-based company called
Betabrand, a clothing designer with a platform
similar to Kickstarter.
“You post an idea of what you would like then
other people can build on it with their ideas to help
designers refine the item.” Chesney noted. “Once an
item gets enough votes it moves to a crowdfunding
stage for prototype designs.”
If it reaches a certain threshold and the company
can guarantee a minimum market, Cheseny says,
Betabrand will manufacture the item and apply the
amount you donated towards the purchase of the
finished item.
“This way the company can reduce space, inventory
costs and risk. It’s almost the opposite of automated
retail yet another online environment to watch,” she
said, noting that many people are already funding
food products on Kickstarter.
“Even if people are not purchasing, they are involved
in a community,” Chesney said. “We call it engaged
shopping. They are not just consumers they are
actually participating in the development of a
product. Betabrands is a signal of the future. We look
for those signals and that’s how we do our forecasts.”
People want to be able to access whatever kind of food
they want at any given time. This isn’t just a 24-hour
grocery store. The idea of convenience has changed
and retailers need to rethink what it really means.
Another field of study for the Institute is automation
and automated shopping via “Body Area Networks,”
as Chesney called it.
“Think about what’s becoming networked and all the
different technologies that are connected,” she said.
“Today it’s a smartphone or Fitbit. But people are
working on clothing with sensors to detect hydration
levels when you’re working out. There are skin or
injectable sensors that could track biometrics and
detect illnesses. All these technologies on or in our
bodies will be connected to the other technology
around us.”
Chesney said people are focused on understanding
e-commerce and online retailing, but “the thing to
understand now is what information is being tracked
about health and nutrition from the different fitness
apps that are on the smartphone. The question is how
retailers can be involved with that.”
All of these things add up to the next step in data
analytics.
“It will be much more nuanced and will offer views
into preferences and tastes for different types of
consumers,” she said. n
Len Lewis is editorial director of Lewis Communications, Inc., a New York-based editorial planning, research and consulting firm. He is a frequent contributor to New Jersey Grocer and several retail publications and trade groups in the U.S. and Europe.
Eric Pearlman, Dir Independent Sales WC 1.916.373.4286 www.cswg.com
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Alabama Grocer: The industry seems to have a
love affair with anything tagged local. What do
consumers really think?
Kummer: “It’s more important than ever even
though consumers don’t really know what it
means. Everyone has their own definition of how
many miles around the store or restaurant it should
come from. Tut they like the idea of helping local
economies. It’s the main reason I care about it.”
Is there a mileage number?
“Some people say 40 miles some say 100. It depends
on where the settlements are around you. You’re
helping keep a place that’s not very far from your
home thriving.”
What about environmental issues?
“I’m not entirely convinced buying local is better for
the environment. It can use more resources than
big farms that offer more economies of scale. And
shipping in huge trucks consumes much less energy
per unit to get to a store or restaurant.”
The whole Chipotle E.coli contamination has put
a spotlight on safety of local products.
“That’s complicated. Organic and local doesn’t mean
safer. Unfortunately, that’s part of the lesson learned
from Chipotle. It generally means it’s better for the
people who raise your food. That’s what I think
consumers should be focused on.”
Is local overrated considering availability of fresh
products from around the world these days?
“Undefined but not overrated. But I think that people
are asking how companies treat their employees
and put a premium on hiring people from the
community. That’s what it means to me. It’s about
making sure people are able to live comfortably
in a community that’s supported by community
services. It’s about farms, small businesses, or artisan
producers creating jobs locally rather than seeing
everything move to cities or big packing centers.”
I get the impression that ‘local’ has just become
a marketing and advertising buzzword?
“I think that’s absolutely true. People have to make
up their own minds by going to their stores and
asking questions. It’s up to consumers to enforce
the definition.”
Are they asking questions?
“No, they just take their word for it.”
Who’s driving local food trends?
“I think it’s Millennials. It starts with concerns about
their own health and that of their families. Then, it’s
about how much money they’re spending on food
and then it’s about incorporating social ideals.”
What’s considered healthy food? Will the
argument over GMOs continue?
“I think the GMO argument will go away regardless
of the demographic group. Lower income people
are equally concerned with health and fresh
products. They may not have access to it and lack
time to make it but they are aware and concerned.”
What do you see coming in new food trends?
“A lot of it was what I saw at the recent Fancy Food
Show – Paleo diets, higher fat meats. There’s much
less fear of fat today so people are returning to meat.
1 5 M I N U T E S W I T H …
Corby Kummer is an acclaimed food journalist, whose books and columns in The Atlantic,
Boston magazine and the New Republic have become must-reads for foodies, amateur and
professional chefs. Kummer, who isn’t shy about sharing his views on what’s being sold and
how, spoke with Alabama Grocer about a few of his favorite issues.
Corby Kummer
Continued on p. 38
BY LEN LEWIS
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Continued from p. 37
Gluten-free is still roaring along and I don’t see a
reduction. But I saw organic leveling out and not as
much product with whole grains as two years ago.”
Natural and organic is price of entry in retailing
these days.
Yes. But organic what?
As a food writer do you think consumers are
interested in getting back in the kitchen and
doing more prep?
“No, I don’t think they are. It’s just wishful thinking
on our part. It’s not that this generation doesn’t
want to return to home cooking, there’s just a
certain fear of it. There’s always the excuse there’s
no time, and buzzwords like local are often proxies
or excuses for not making food for your family.”
Anything retailers can do to get people back
in kitchen?
“I think there should be more chopped, fresh
vegetables. Also, cooking classes at supermarkets,
and community centers would help, as well as
demos in stores if retailers are willing to make the
investment. These ideas have been around a long
time. Generally, what gets people to cook again is
when they realize they can save money by doing it
themselves.”
What do you think about home delivered
meal kits?
“I did a recent column on that in the New Republic. I
asked why anyone would ‘pay a premium for a large
box filled with ice packs and little baggies and tiny
shampoo-sized bottles whose contents will produce
a few meals and a lot to recycle.’ Clearly, they are
competing with supermarkets. I’ve tried a variety of
meals from four different companies and what they
had in common was a lot of packaging. It has its
advantages, but I wouldn’t buy another meal kit.” n
1 5 M I N U T E S W I T H …|
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